8 Red Flags On A Seller Disclosure
Buying a home is a little like falling in love. When you first start dating, you’re smitten. Which also means you’re more likely to overlook some critical flaws that might otherwise slowly crack away at your relationship down the road, potentially leading to heartbreak. Such is the case when buying a home.
1. Notes or lack of details about the roof
It’s not a hard and fast rule that you should dig deeper into what a seller or inspector means when they say “small roof leak” or “a few roof tiles missing.” You may want to have a professional roofer come take a look before buying.
2. Any structure-related items
So if you’re faced with exterior wall cracks, sagging rooflines, or significant cracks in the foundation, and your inspector points them out or the seller mentions them in the seller disclosure form, seek guidance from your real estate agent and seriously think of having an industry specialist take a look at the potential problem.
3. The dreaded “no representation” or “unknown”
It’s not necessarily a sign to run away from a home, but if a seller marks an item such as the basement or windows on the seller disclosure statement as “no representation”. Then you’ll most definitely want an inspector to look more closely at that area.
What does it mean? Sellers can opt to put “no representation” on an area of the home in their statement to avoid disclosing the conditions or characteristics of an area of the property, even if they know of issues. It’s sneaky, but it can protect the seller from potential litigation from the buyer down the road.
4. Mentions of previous flood damage
Flood damage can wreak havoc on a home’s foundation and cause mold issues, among other things. That’s why when you see a seller disclose that the home has had flood damage, no matter how small, the advises is to be wary. If your inspection comes back with dampness or strong odor you may want to call in a mold specialist.
5. Any liens on the property
Issues regarding liens when a legal right to the property is held by a creditor or some other party aside from the seller should pop up during the title search. Be extra leery if a seller discloses one in their statement.
Be sure to consult your title company, real estate attorney, and the agent representing the other side to get clarity around the issue and time frames it could take to clear the title. In our experience, liens can be removed, but it typically takes twice as long as anticipated, and a buyer should be prepared for delays
6. Any easements or land-use restrictions
If you buy a home planning to build an addition or make major renovations, you may discover after the sale closes that existing easements on the property forbid adding permanent structures in the exact spot you were hoping to make your new master suite. Easements and land restrictions can affect the value of a property.
A buyer should get a title report giving a detailed description of the easement. In addition, a survey would be prudent to identify landmarks, how it affects the property, and if it is of no harm or affects the future marketability or value of the property.
7. Failure to get proper permits for additions or improvements
Heed this warning, friends: Failure to get permits is a huge red flag!
Without permits, a buyer has no idea if the work was completed by inexperienced and unqualified homeowners or a true craftsman. In these scenarios, we recommend a thorough home inspection by a licensed home inspector of the work completed. In addition, a thorough review of seller’s disclosures to understand with clarity the scope of work completed.
8. Lead paint or asbestos
Don’t automatically rule out buying a home if a seller discloses that the home has (or had) asbestos or lead-based paint.
It is better to be cautious and do your homework before correcting, removing, or remodeling these types of homes, though. Talk to your local home inspector about evaluating and testing the property. Review your local health department requirements. Once you know the safe measurements in your area, you can do the proper testing for these items. Don’t forget to learn how to properly dispose of these items safely. By knowing the costs and health regulations, you can factor in the cost of removal or remediation and factor that into your offers.
Podcast: Play in new window | Download