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The fine line between staging a home and hiding defects

On Behalf of | Jun 14, 2024 | Real Estate Transactions |

Real estate agents have a duty to act in the best interests of their clients. Fulfilling that duty often involves trying to get as much as possible and helping them sell a home. In some cases, depending on how an agent structures their charges, maximizing the sale price of the home could even increase their commission.

Unfortunately, sometimes efforts to optimize the appearance of a home to make it attractive to buyers could lead to allegations of unethical conduct on the part of the seller and their real estate agent. Staging a home takes planning and may involve investments such as painting certain spaces or making repairs that a seller has previously procrastinated about completing.

When do attempts at staging a home potentially put the seller and their agent at risk of buyers claiming fraudulent misrepresentation?

Attempting to hide a defect could lead to a lawsuit

There are certain cosmetic issues that can serve as indicators of serious issues with a property. For example, cracks in plaster or drywall can be early warning signs of foundation issues. Water stains on ceilings could be evidence of leaking pipes or a roof that requires replacement.

Covering up cosmetic issues in a home is not necessarily fraud, but sellers do have a legal obligation to disclose known issues with the property. Covering water staining or patching cracks can be acceptable repairs as long as the written disclosure indicates that there are issues with the systems causing those cosmetic warning signs.

If sellers simply cover the signs of age and damaged systems and do not disclose them, that could potentially lead to a lawsuit brought by frustrated buyers after they take possession of the property. Agents who know about defects at a property also have an obligation to ensure that the seller discloses those matters to prospective buyers in writing as required by the law.

Helping sellers optimize what they get for a property doesn’t need to involve fraudulent misrepresentation. Agents who understand the fine line between cosmetic improvements and hiding property defects can use that to optimize what their clients earn during residential real estate transactions without crossing the line.

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