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Although you can sell a home on your own, it is wise to consult with a real estate attorney as it can get rather complex especially if there are contingencies involved. As the seller, you are normally responsible for paying the broker?s commission.
All potential homebuyers are afraid of purchasing a money pit. A house may look good from an aesthetic standpoint, but what if it develops problems after you've put money down, signed the papers and moved in? A house that seems in perfect condition when you buy it during the summer may have a roof that leaks during the winter. Or the kitchen floor that looks fine during an open house may have a crack that is revealed only after the sellers move out.
Disclosure laws
Although New York does not have a disclosure law, there are ways you can help prevent a nightmare from happening to you.To prevent the above from happening, many states have enacted statutes that require sellers to disclose hidden defects to potential buyers. These states usually require the seller to fill out a disclosure form that asks a series of questions about the property. Even if state law does not require the seller to fill out a disclosure form, the buyer or real estate agent may require it. Property disclosure statements cover such topics as:
drainage problems,
faulty furnaces,
roofs,
termites,
cracks or flaws in walls or foundation,
leaks,
fires,
plumbing problems,
sewage problems,
dampness in the basement or attic, and
whether work was done to code.
The following startes have disclosure laws: Alaska, California, District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maryland, Maine, Maryland, Michigan, Mississippi, Nebraska, Nevada, New Hampshire, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Virginia, Washington and Wisconsin.
Sellers must fill out the form truthfully to the best of their knowledge, but they will not be liable if they don't disclose defects that are unknown to them at the time. If there is any reason to believe there is a defect in the property, however, the seller should make every reasonable effort to investigate.
The disclosure statement does not act in place of a home inspection by a qualified individual. Buyers should still hire an inspector. He or she may find something the seller didn't know about.
If defects are disclosed, it doesn't necessarily mean the deal will be off. Buyers can use information disclosed by the seller as a negotiating tool. For example, you may be able to get the seller to agree to repair the defect before the closing or to get money off of the purchase price or closing costs.
Caveat Emptor
In states without disclosure laws, the historical rule with regard to real estate sales is caveat emptor, meaning "let the buyer beware." Under caveat emptor, the seller is not liable for defects if:
the defect is obvious upon reasonable inspection, the buyer had access to inspect the premises, and there was no fraud.
The cause of the defect doesn't have to be obvious; if the defect itself is obvious, you have a duty to investigate the cause. For example, if you notice water in the basement, you have a duty to find out why the water is there. If you don't investigate and go ahead with the purchase of the house, you cannot later claim you didn't know there was a problem with leaking in the basement.
Even in states that follow caveat emptor, there are certain things a seller must disclose. Some courts have held that a seller who doesn't disclose a hidden defect commits fraud if the buyer could not discover the defect through reasonable diligence. For example, if a seller knows there is a leak in the basement that is only noticeable when it rains and there is no way for the buyer to discover this during the normal house-buying process, the seller must disclose this to the buyer.
In addition, some courts have required sellers to disclose information about problems occurring on neighboring property that affect the property for sale. For example, sellers may have to disclose if there is a toxic waste dump near the property they are trying to sell.
What if the seller doesn't disclose a defect?
If a seller doesn't disclose a hidden defect, or erroneously fills out the property disclosure form, the buyer can sue for fraud. The seller may have to pay for any repairs to the property that result from the undisclosed defect. However, if seller discloses a problem and you fail to investigate it, you can't sue the seller later.
If the seller's real estate agent does not require the seller to fill out a property disclosure form or aids the seller in lying about the condition of the property, the agent may also be liable for any damages.
Disclosing lead paint
The federal Lead-Based Paint Hazard Reduction Act requires sellers to give buyers of homes built before 1978 information on lead paint. Sellers must provide buyers with: a pamphlet on lead hazards and what to do about them, a warning statement, a disclosure of any known lead-based paint hazards on the property, and actual test reports, if available. If they wish, buyers have 10 days (or another mutually-agreeable period) to test for lead-based paint hazards at their expense. The federal regulation does not require anyone to test for or abate lead hazards if he or she chooses not to. However, states may have laws regarding lead paint that are more stringent than the federal law.
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