The typical home sale in Berkeley, Oakland and surrounding areas involves the seller providing a “disclosure packet” to prospective buyers before they make an offer. There is no set requirement of what is contained in the packet, but it will usually include a pest control inspection, a natural hazard disclosure, and various statutory disclosure forms completed by the seller.
The buyer then makes an offer “as-is” in regards to all the disclosed information, but still subject to their ability to inspect the property themselves during an inspection contingency. At the end of the inspection period, the buyer can do one of 3 things:
- They are satisfied with the results of their inspections and still want to buy the house per the original terms. The inspection contingency is removed.
- They are not satisfied with their inspections and wish to back out of the transaction. This can be done without penalty.
- They still want to buy the house, but….
The “but” is that they want the seller to agree to a price concession based on information learned during their inspections. Here’s where the notion of “good faith” comes in.
If the buyer asks the seller for a concession based on information that was contained in disclosure packet, I would consider this done in “bad faith.” This takes a lot of nerve, and certainly will not please the seller. Will the seller agree? Only if there is nothing better on the horizon, or he is desperate.
However, if the buyer is asking for a concession based on newly discovered info, something not covered in the disclosures, I consider this fair game, and done in “good faith.”
The moral of the story is that the more thorough the disclosure packet, the less chance for a buyer to discover something new in the course of their inspections. I’ll cover what constitutes a thorough disclosure in another post.
Brett Weinstein
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