Elizabeth Weintraub is a Realtor in the Sacramento area with a specialty market of Land Park. She always brings us sound advice on many aspects of our Industry. Here is an excellent article on the Seller's responsibility to disclosure any knowledge that affects the material value of their property. Excellent example for all Sellers. Thank you Elizabeth for a great post!
There's a good reason for agents to hang on to old escrow files in paper or digital format. Especially buyer's agents. That's because somewhere along the road the buyer might become a seller, and those inspections -- performed when the seller was a buyer -- could become important seller disclosures to the next buyer.
A listing agent and home sellers are required in California to disclose all material facts to a home buyer. You see, buyers generally don't care too much about what you tell them as long as they are informed. It's the withholding of information that can get an agent and seller into hot water. It's also one of the reasons why agents and sellers must give a new buyer a copy of the former home inspection report, particularly if that home inspection was the reason the previous buyer canceled the escrow. This reason alone should give buyers a bit of leverage when negotiating a Request for Repair with the seller.
True story shared with me by a Sacramento home inspector. A quad-level, multi-million dollar home in the Sierra was purchased by three lawyers from the Bay area. When they bought the home, the sellers disclosed there were no permits issued for several additions, among other issues. The lawyers never lived in the home and they rented it out.
Later on, the lawyers decided to sell the home. They hired the agent who represented them when they bought it to be their listing agent. The listing agent put the home on the market and sold it to new buyers in dual agency capacity. After escrow closed, the buyers decided to install an exterior elevator. The neighbors next door objected to a glass monstrosity going up that would block their special view. So, the neighbors called the building authorities. The building authorities came out to inspect the home and discovered the home had several levels added without a building permit. The cost to tear it down and rebuild was outlandishly expensive.
The new owners claimed they were never told about the lack of permits nor about the neighbors next door. They sued. You can imagine the mess that this caused. Lawyers are held to a higher standard of knowledge. The agent represented both the sellers and the buyers. The sellers did not disclose. The agent did not disclose. Can you imagine being a fly on the wall in that courtroom? Holy cow.
The moral of this story is always disclose. Buyers should always receive copies of previous home inspections and disclosure reports, even if the work has been completed. Buyers have a right to know and a legal right to know.
Photo: Big Stock Photo
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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Jeanean - As Elizabeth's blog so eloquently illustrates, "Always disclose" - and always keep electronic or hard copies of past escrows for a period of time! I keep mine longer than most, and there have been a couple instances where I was very glad I did!
Gives one pause to stop and ask before we list. Such a litigious society we live in.
Hello Mryl, yes it's always a must to disclose and I also keep my files for three years. I hope that's the right number? My old brokerage always kept them three years. Thanks for the visit and read!
Hello Paula, very important to disclose. I always tell my sellers that it is "the law" that we disclose. We do not have to fix....just disclose. I also tell my buyers that it is our responsibility to investigate and discover any thing of concern. In a court of law, that is the Buyer's responsibility....to look beyound the disclosures!