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Truth in Real Estate

To tell or not to tell?


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Every property has idiosyncrasies, and certainly, every home is not perfect. It's highly likely at some point during homeownership something has occurred that will need to be disclosed when selling the property. As a broker, I have yet to meet a seller who hasn't expressed apprehension about disclosing potential and past problems that could influence a buyer's decision. This apprehension begs the question: what and how much does a seller tell, not only their broker, but also potential buyers?

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Purposely withholding pertinent information about a property likely will land a seller in a serious conundrum that most certainly can/will lead to a sale fail and possibly legal ramifications. There have been many instances of lawsuits across the country in which sellers have paid significant amounts of money to buyers, because the seller was not forthcoming or honest with pertinent information about the property.

Think of it in a parallel to online dating. A person sees a profile that interests them. Everything looks good and there is a certain level of trust that the other party is being transparent and forthcoming; and then, they meet, and it turns out that the information given was less forthcoming. My point in using this analogy is that more often than not, the reality of a situation will eventually come out; be it when selling a property or online dating.

Real estate brokers are employed not only to help one sell their property, but also to help protect a seller from potential issues before, during and after a transaction. I cannot stress enough how important it is to discuss all potential issues with one's real estate broker. Realtors are here to help guide a seller through the process, protect them from potential sale fails due to failures to disclose and mitigate possible disclosure issues.

Some of the more common disclosure areas are lead-based paint, pests, fire and mold/water damage. Regarding water damage (especially within the last three years in Central Oregon and the amount of water damage resulting from severe winters), I cannot stress enough the importance of disclosing any history of water damage or mold. First because, it more often than not will come up in an inspection report and second, because a buyer can request a CLUE (comprehensive loss underwriting exchange) report. This allows the buyer to see any insurance claims that have been made on the property in the last seven years.

Other areas that are important to disclose upfront are things like permitting. Are there any structures built or major remodels to the property that have not been permitted? This one is a big one for buyers, as it determines potential liability to remedy a non-permitted structure down the road. It also can determine insurance coverage and liability. A buyer has the right to know the facts regarding permitting so that they may make their own educated decision on those facts as they move forward.

There are several other examples of disclosure issues. It is crucial to disclose to your real estate broker any potential issues and trust their guidance and knowledge. Realtors cannot protect you from what they don't know. The rule of thumb is to disclose everything you know about the property. Better to be open, rather than have the proverbial skeletons dancing out of the closet later down the road.


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