There's Something I Don't Like On the Residential Property Disclosures!

By
Real Estate Agent with RE/MAX Elite 513.520.5305 www.LizTour.com SAL.2002007747

basement flooding?There's Something I Don't Like On the Residential Property Disclosures!

Dear Liz,
I once had an agent tell me I couldn't ask for anything to be done about basement water leakage because it was listed on the property disclosures.  Is this true?  Water problems can be pretty expensive!
Signed,
Concerned in Cincinnati


Dear C in C!
The state of Ohio has a MANDATORY residential property disclosure report that has to be provided by sellers to the buyers.  There are exceptions for this requirement, primarily in cases where the seller would not have true knowledge of the condition of the home because they never lived in the home (estate sales, foreclosed homes, etc.).

The purpose of this form is to provide the buyer with a list of things the seller knows about in regards to the home's condition.  It prevents surprises to the buyer, and potentially lawsuits AFTER the closing.  This form isn't for cosmetic appearance items, but for material condition items that might not be apparent to a buyer, and perhaps not even to their home inspector during the buying process.

The period covered in Ohio is typically for up to the last five years.  For instance, has the owner had to make a repair because of some type of damage?  E.g. A burst water pipe?  Tree falling on the home?  Termites? This is the opportunity for the seller to tell you, the prospective buyer what has happened AND what they've done to correct the issue.

Having an issue on the property disclosure form is NOT inherently a bad thing.  If the issue has been properly repaired and NOT recurred, then it's just a matter of assessing the repair and your comfort level with the
repair.

jailWhat the property disclosure is NOT?  It's NOT a "Get Out Of Jail Free" card for the seller!  Just because the seller tells you the home's attic is occupied by Flying Monkeys looking for Dorothy doesn't mean you can't ask him to call in the exterminator as part of the contract negotiation process.  The same principle applies to any other disclosed item!

Basement water intrusion issues noted? 

You've got choices to make!  You can accept the home "as is" for this particular condition knowing you have a risk of having an indoor pool the next heavy rain.  Or you can make that assessment/repair part of the contract negotiation.

The seller and the listing agent may argue that "we told you about that issue and priced the home accordingly!".  And that argument MAY be valid. 

If the home is priced below every competitor in similar condition, they've decided to use price as the compensation for condition and this COULD be a deal breaker if you as the buyer insist they repair.  That said, dependent upon your cash flow and seller's cash flow situations, perhaps you can still get that repair done by offering more for the home and having the repair performed prior to closing.
Guardian

Like many things in real estate, the answer is "It Depends!".  Just
another reason it's so vital to have a buyer's agent that is knowledgeable and who WILL protect for YOUR best interests when buying a home in Warren County.  Oh, and DON'T skimp on the home inspection!  The inspector can save your bacon in situations like these!

We're here to help!
Liz and Bill aka BLiz

Posted by

Serving Warren County Ohio & Adjacent Areas

 

The Liz Spear Team of RE/MAX Elite
Elizabeth Spear, ABR, CRS, Ohio License SAL.2002007747

William (Bill) Spear, CRS, Ohio License SAL.2004011109  Kentucky 77938
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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Melinda Pearson 01/15/2011 03:00 PM
Topic:
Home Buying
Location:
Ohio Warren County
Groups:
Realtors®
RE/MAX Active Rain Bloggers
Ohio Active Rainers
Cincinnati Real Estate
Advice for Buyers
Tags:
property disclosures

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Rainmaker
1,544,895
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

BLiz:  Excellent points brought up.  If the seller says the basement 'leaks on occasion' (cough,cough) then possibly they have compensated that in the list price.  Whatever the buyer feels comfortable with. Most times the buyer is NEVER comfortable with a basement leak.

I personally like all forms of wildlife so the monkeys in the attic wouldn't bother me in the least unless they kept late hours.

Jan 15, 2011 04:07 AM #47
Ambassador
2,712,343
Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Jeanne, Ours has some overlap (well vs. public water for instance), but doesn't touch on age of appliance, water heater, furnace, etc. nor what is or isn't included.  But regardless, excellent sources of data when considering a home purchase.

Christine, I think you've got the nutshell version nicely summed up! :)

Jan 15, 2011 04:11 AM #48
Rainmaker
1,219,802
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

Liz & Bill--Well written.  Lots of good information for both buyer & seller.  Congratulations on Featured Post.

Jan 15, 2011 04:12 AM #49
Rainer
37,641
Brad Hornshaw
Brad Hornshaw Realtor Lynnwood, Bothell, Everett - Lynnwood, WA
Realtor, Listing Agent, Buyers Agent, Investments
Hi Liz Very well put, in real estate every thing is negotiable...........Brad
Jan 15, 2011 04:28 AM #50
Ambassador
2,712,343
Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Lyn, Those monkeys are late night partiers....howling at the moon...too many banana daquiries perhaps?? :)  And as a buyer, it is tough to get comfortable with any level of water intrusion, unless you get the chance to experience.  The clients in question were told "minor", most would say an inch of standing water after a heavy rain doesn't qualify as "minor"!!

Mary, Thanks!  We represent both halves of the equation so have encountered the good and the bad on dealing with disclosures.

Brad, And EVER more negotiable under the current environment!

Jan 15, 2011 04:40 AM #51
Rainmaker
539,114
Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

The sellers disclosure is one thing.

The purchase contract is another thing.

Unless they are tied together and the disclosure is made part of the contract, it is irrilevant what the disclosure says.  The purchase contract rules.

Eve in Orlando

Jan 15, 2011 05:28 AM #52
Ambassador
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Eve, For Ohio, the residential disclosures get signed by both parties and are part of the purchase contract package if not specifically a part of the purchase contract itself.  If there was a disclosure issue that needed addressed, it ideally would be explicitly called out in the offer rather than waiting until the inspection period to address.  Legally, the seller can be held liable for something in the disclosures if found later to have been deceitful in the completion of the forms.  It's rare, and most buyers won't pursue because of the legal costs and stress involved, but some do.

Jan 15, 2011 05:44 AM #53
Rainmaker
166,473
Tina Gleisner
Home Tips for Women - Portsmouth, NH
Home Tips for Women

Good discussion and I found the 5 year period interesting ...

Jan 15, 2011 02:12 PM #54
Ambassador
2,712,343
Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Tina, Not sure why the 5 year callout, perhaps the assumption is that it's an adequate time period for things to happen and determine if they'll recur?

Jan 15, 2011 02:21 PM #55
Rainmaker
1,317,551
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

I think this is an important topic.  Often the seller's disclosure is less than full disclosure... or the seller will minimize the problem.  It is important for buyers to reserve the right to investigate further dispite the sellers disclosure of an item... e.g., water problems. 

Jan 15, 2011 03:09 PM #56
Rainmaker
646,971
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

Great explanation Liz!   We have a property disclosre too in CA and I agree with you that just admitting ot known issues doesn't mean we can't ask the sellers to fix them.

Jan 15, 2011 03:27 PM #57
Rainmaker
1,545,411
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Sounds like the agent who advised that person was either misguided or just didn't want the buyers to ask for repairs.

Jan 15, 2011 06:45 PM #58
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Joan, There's always that risk that the problem has been sugarcoated or minimized.  Nice to have the home inspectors available to dig deeper!

DeeDee, We ask if appropriate when repping buyers, and expect the same when we have the listing.  Hopefully it's already been effectively corrected.

Marte, Their feeling was he just wanted to check and wanted them in something ASAP because he was afraid they might go rent instead.  We can only hope that was truly NOT his rationale.

 

Jan 15, 2011 10:17 PM #59
Rainer
69,104
Robert Courtney
Lihue, HI
Century 21 All Islands, RA, CDPE, MCRE, CIAS

The Disclosure Addendum is a legal document that gives personal knowledge to all parties of the Sellers home.  It is a beginning point for negotiation, but it is also used when the seller and buyer run into "surprises" by attorneys.  We should help the seller dig deep into their memory when explaining this form.  Remember THEY fill it out, not us.  

Jan 16, 2011 03:26 AM #60
Ambassador
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Bob, It's one of the things they make VERY clear here during real estate classes, the sellers fill them in, or one of their family members if need be, but we don't touch them.

Jan 16, 2011 03:35 AM #61
Rainmaker
1,431,210
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

If it is disclosed up front any repair request should be part of the offer.  If it is disclosed after the offer is made then you can ask for repairs and of course they can refuse.  And the entire thing could fall apart.

Jan 16, 2011 04:07 AM #62
Rainer
60,032
Dennis & Terri Neal
RE/MAX, Big Bear - Big Bear Lake, CA
Your Home Sold in 45 Days or We Se

Everything is negotiable even if it is disclosed. Thanks for the post.

Jan 16, 2011 06:07 PM #63
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Gene, We'd agree that's the optimal way to approach, and like everything in real estate nowadays, it doesn't take much to upset the cart!  Hopefully both parties can stay rational.

Dennis and Teri, Just wish the agent had told the client in the post that, they might have been able to avoid paying thousands in waterproofing repairs.

Jan 16, 2011 10:23 PM #64
Rainer
12,048
Robert Adams
Keller Williams Realty, South Tampa - Tampa, FL

Great post: the key is if the buyer thinks the house is priced low enough to allow for the built in equity of a repair, such as water intrusion.  Another aspect, if property values are falling in the local area, will they ever recoup? Naturally, the emotional attatchment to a house, its location, its feel, etc. may override the logic on the monetary aspects.  Each situation, house, buyer, and seller is different, which is where our service creates value: to create those positive outcomes for all!

May 11, 2011 10:44 PM #65
Ambassador
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Robert, We're fortunate here, it seems we've stabilized, perhaps even making a climb up if you're in the right neighborhood.  So the crux of it really is, does the value exceed the risk of the repair for the buyer.  And we've seen the emotional totally override the logical price to pay.  If you have the green to make it happen, then all bets are off as to what the buyer will actually do.

May 11, 2011 11:39 PM #66
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