Buyer Beware: Disclosures Don't Tell the Whole Story!

Real Estate Agent with Cedar Rapids/Iowa City, IA KW Legacy Group S44645

Recently, I received a call from a buyer's agent regarding a home that I had listed and sold to her buyers several months ago.  She was questionning whether the seller knew that there was old termite damage in the ceiling of the main floor of the house.  When I asked how it was found after the closing and not by the termite inspector, she indicated that the buyers had removed the crown moulding as well as the wallpaper and it was found then.  That explains why the inspector didn't find it, it was HIDDEN.  The agent was accusing the sellers, who had lived there for over 45 years, knowingly covered up damage with crown moulding over 20 years ago.  Well, since it was a POA that completed the disclosures due to an owner with dementia, there was limited information provided in disclosure other than what the seller had maintained for records and repairs.  So it begs the question, did the seller know and that is why they added the moulding?  Or did they add the moulding because it was all the rage back then?  We will never know!


Another situation happened to a friend of mine.  Her brother had purchased a home about a year ago from a seller that had lived in the home for just over 11 years.  In that time, she disclosed that she had needed to file two separate insurance claims for a failed sump pump.  The second time her basement flooded, she had added a battery backup system as well.  When the basement flooded over the weekend, the water was worse in one corner of the basement and the sump pump WAS working, it had not failed.  Upon pulling back the carpet in that corner, a secondary sump pit was revealed that the current owners did not know existed.  Imagine finding this under the carpet!!!!

Hidden sump pit


There was no pump in it and the water was coming from that hole faster than they could get it out!  The questions is, the previous owner did not disclose the existence of this secondary pit.  It was hidden under the carpet and not mentioned in the disclosure.  Although you want to give the seller the benefit of the doubt, it seems unlikely that she didn't know it was there when she had filed two claims and the carpet had been replaced more than once.  Was it an oversight?  Who is to blame?  


The seller disclosure is completed by the owner and it is intended to disclose things that the seller knows for the time period that they have owned the house. I have seen on disclosures from time to time that the current seller discloses something that was disclosed to them about the home from the owner before them.  But that doesn't happen very often.  The disclosure completed by the owner holds the broker and the agent harmless from the information and misinformation that may be contained in it.  And it is difficult to prove that the seller knowingly deceived the buyer.  Still, the question much can you trust the seller disclosure?  There are some things that inspectors can't see.  Welcome to the worst part of home ownership!


Keep smiling!




photo shared from a friend that found a hidden sump pit under their carpet.

Posted by


Karen Feltman, REALTOR®, ABR, AHS, CHMS,                                                                      CNE,CRS, e-Pro, green, GRI, SRES, TRC

Keller Williams Legacy Group

4850 Armar Drive SE Ste B

Cedar Rapids, Iowa 52403


Mobile  319-521-0701

Licensed in the State of Iowa

© 2010-2018 by Karen Feltman, Cedar Rapids/Iowa City Relocation Specialist 


Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Fred Griffin, on leave of absence from ActiveRain 09/05/2018 09:30 PM
  2. Gita Bantwal 09/09/2018 07:57 AM
  3. Gabe Sanders 09/19/2018 11:00 PM
Home Buying
Iowa Linn County Cedar Rapids
Active Rain Newbies
1st Time Buyers
Iowa Real Estate
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property disclosure
buyer advice
seller disclosure
hidden defects

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Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, - Monroe, NY
The House Kat

Sometimes sellers do not know that there was a pre-existing condition of some sort in the house. If the seller doesn't know, and the inspector doesn't see it, the new buyer might have to deal with it. Unfortunately, buying pre-existing homes can come with challenges!

Sep 06, 2018 04:22 AM #9
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Karen --- you make some excellent points about disclosures.  It's the beginning not the ending---additional investigation is necessary and even then logic comes into play.

Sep 06, 2018 04:54 AM #10
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

In Maryland we are able to sign a disclaimer but have to disclose material defects -

Sep 06, 2018 05:33 AM #11
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

The most comprehesive honest disclosures filled out happens to lawyer owners, because of fear to be sued.  Most inspectors have another day job and remains to be visual. Few are small enough to crawl under the house and inside the attic. Most is visual and they only spot check electrical services.

As for typ sellers rarely they are 100% honest. In our area the buyers can do their own inspection but the results probably not carry any weight as no contigiencies including loan is released at time of purchase. 


Sep 06, 2018 06:06 AM #12
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

I repreat the infamous words "trust but verify". I do like to explain what hidden defects mean and to look for red flags when looking at the home. 

Sep 06, 2018 06:07 AM #13
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

The buck stops with the licensees and we do well to DO WELL on what we know

Sep 06, 2018 06:15 AM #14
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

In downstate, New York, owners are usually advised by their attorney to give money at closing in lieu of filling out a condition disclosure form. In effect, you're paying for the buyer to get an independent professional to assess the condition of the home.

Sep 06, 2018 07:45 AM #15
Gordon Crawford
Gordon Crawford Home Selling Team - Morristown, NJ
Your Morris County Specialist!

Great blog Karen.  I had a case where my buyer bought a house where the seller said there was no oil tank.  When that buyer went to sell, the buyer did a tank sweep and there was a 1200 gallon tank.  The original seller didn't know and didn't disclose.  Now we do tank sweeps on every property!  Live & Learn

Sep 06, 2018 01:21 PM #16
John Myers
Myers & Myers Real Estate, Inc - Albuquerque, NM
Your Trusted Real Estate Advisor

Congratulations on the featured article.  I just helped a buyer purchase a home and a week after he purchased the home he discovered most of the windows have dry rot.  He also discovered someone painted over the dry rot on a few of the windows to hide the dry rot.  The home inspector did not catch this either.  Hard to tell if the previous owners knew about this.  Any ways this is a big problem for my buyer as the windows need to be replaced.

Myers & Myers Real Estate

Sep 06, 2018 03:33 PM #17
Susie Kay
Ultima Real Estate - Plano, TX
North Dallas Specialist

What a great post Karen Feltman !  I agree, they don't tell the whole story. Sometimes we have elderly sellers and have lived in the property for years.  They don't necessarily remember everything.

Sep 06, 2018 05:02 PM #18
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Buyer beware even if there is a seller disclosure!  Sometimes sellers are negligent completing the doc; they rush through it, don't want to be specific.  Don't expect a perfect house--even if it's just built!

Sep 07, 2018 08:33 AM #19
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Buyer beware is so turn Karen Feltman,  If a inspector can not see it, how can they report it.  They do not take the house apart.


Sep 07, 2018 09:29 AM #20
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

Some people are not great historians, however a lot can change in 45 years.  With respect to living in the house for 45 years, who can remember every little bit of maintenance that you may have had to do over almost 5 decades.  

Sep 07, 2018 03:06 PM #21
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Karen

This is a tough subject and sometimes there is more that doesn't meet the eye or the disclosure. Sometimes even a very through and diligent buyer, and inspector, will miss something and it's not always because a seller did not disclose.


Sep 07, 2018 04:11 PM #22
Anne Corbin
Long and Foster - Lake Anna - Spotsylvania, VA
Serving Lake Anna & Central Virginia

WOW is all I can say

Sep 09, 2018 04:15 PM #23
Jon Quist
Tucson's BUYERS ONLY Realtor since 1996

A disclosure form is only as good as the person filling it out. Due to either plain ignorance or malicious intent, the report still could be dangerously incomplete. A great set of inspectors can save a LOT of trouble down the road.

Sep 10, 2018 12:32 AM #24
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Great story, Karen.  And a lesson here for all buyers that they need to verify what they can but no one will ever know everything about a home.

Sep 10, 2018 05:37 AM #25
Dave Rosenmarkle
Highland Realty - Arlington, VA
32 years of providing fully satisfying service!

I betcha there are lots of these stories that will always surface when someone thinks they will get away with it.

Years ago, I sold a townhouse to a single gal who listed it for resale with one her friends 10 years after having bought it. I was working with a buyer who had interest in this property, wrote an offer and during the inspection, while I was sorta looking things over and decided to move a small ottoman out of the way. Under the ottoman was a stain that was never going to come out. 

My buyer client wanted house, but not the stain. The owner, my former client became very annoyed with me for the discovery and thought that since I discovered the prooblem, I should take care of it.... The carpet was too old to patch and she ended up having to replace the full room of carpet.


Sep 10, 2018 04:24 PM #26
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

In 20 years...this has happened once...and yes I do think the Sellers did know...and so did the court !

Sep 20, 2018 05:34 AM #27
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

In NC the sellers have an out! Our disclosure statement has 3 possible answers! Each question can be answered yes, no, or no representation! Most people will answer yes or no, but we do see no representation fromtime to time. I tell my buyer clients to always take the disclosure statement with a grain of salt. Every buyer needs a top flight inspector!

Oct 15, 2018 07:51 PM #28
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Karen Feltman

Relocation Specialist in Cedar Rapids, Iowa
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