Sold "as-is" is a prohibited disclaimer - sell property "as-disclosed" (taken from my Ethics Book) I'm taking my renewal classes and this is what I find in my Ethics Book, How do I avoid that statement all bank owned properties are sold "AS IS" below is the rest of the information taken from my book.... I have added my comments with **
Sold "as-is" is a prohibited disclaimer - sell property "as-disclosed" (taken from my Ethics Book)
I'm taking my renewal classes and this is what I find in my Ethics Book, How do I avoid that statement all bank owned properties are sold "AS IS" below is the rest of the information taken from my book.... I have added my comments with **
A broker and his sales agents must disclose the physical nature and condition of a property when soliciting an offer to purchase.
Brokers and agents have a duty to timely disclose to all parties involved in a real estate transaction any significant physical aspects of a property that may affect the property's market value.
To comply with this duty, the listing broker (or seller) of a one- to-four unit residence must provide the buyer with a Transfer Disclosure Statement (TDS) prior to making an offer and disclose all defects then known to the broker or the seller. [Calif. Civil Code §§1102 et seq; see first tuesday Form 304]
**(you will not get a TDS with a bank owned property.)
To be effective, property disclosures must be made to the buyer before offers are prepared and prices agreed to. If not, the buyer may:
1. Cancel on discovery of the broker's failure to previously disclose. or
2. Close escrow and seek recovery of the costs to cure the belatedly disclosed and previously known defects, unless a contingency exists in the purchase agreement for further approval of the property's condition. Any attempt to have the buyer waive his right to the mandated property disclosure statement is unenforceable. Failure to disclose property conditions is against public policy. [CC §1102]
**(for one of my transaction the bank ask my client to get a Home Inspection before she could submit an offer)
** I think that using the AVID form is another way to safeguard Listing agent and Banks
The seller of one-to-four unit residential property must always prepare and deliver a Transfer Disclosure Statement (TDS).
Further, a broker has a general duty to all parties in any type of sales transaction to disclose at the earliest possible moment his awarness of any property defects.
For example, a seller's listing broker is aware the residence fails to conform to building and zoning regulations,a defect which if known to a buyer might affect the price he is willing to pay - a material fact.
The broker knows the buyer who is interested in making an offer is not aware of the violations and might reconsider the price he is willing to pay for the property if he learns of the violations. The broker decides not to disclose his knowledge of the defect.
In an attempt to cover the omission, the broker writes an "as- is" disclaimer provision into the purchase agreement, stating the buyer accepts the property in an as-is condition and has satisfied himself as to the property's conditions. After the buyer acquires the property, the city refuses to provide utility services to the residence due tothe building and zoning violations.
The buyer demands his money losses from the broker, claiming the broker breached his agency duty to disclose conditions of the property known to the broker. The broker claims the buyer waived his right to collect money damages when he signed the purchase agreement with the "as- is" disclaimer (as is done with car sales).
Does an "as-is" disclaimer shield the broker from liability for the buyer's losses caused by the building and zoning violations?
No! The listing broker has a general duty, owed to all parties to a transaction, to disclose all property conditions that affect the value and marketability of the property which, due to an inspection, were or should have been known to the broker. This duty is not excused by writing an "as-is" disclaimer into the purchase agreement in lieu of making the factual disclosures. [Katz v. Department of Real Estate(1979) 96 CA3d 895]
Finally, public policy prohibits the sale of one-to-four unit residential property "as-is," causing most form publishers to eliminate boilerplate "as-is" clauses." [CC §1102.1]
** Question to my fellow realtors, most property state AS IS disclaimer, when advertising a bank owned property, how can I caution myself and my clients? As a listing agent and or a Buyer's agent... or am I making to much of this AS Is article from my ethics book?