Posts Tagged ‘home seller’

Can a Home Seller Be Sued for Contractor’s Knowledge of Problems?

Wednesday, November 1st, 2017

As a home seller it is imperative that you make sure you do everything you can to avoid lawsuits from your new buyers. Failure to disclose has been one of the most litigious causes of action in real estate law. Upon selling property, sellers must disclose all they know about the property according to state mandated forms – this usually includes past insurance claims, any upgrades or improvements, damage to the property, repairs, noise issues, and many other questions. Sellers must answer these questions to the best of their knowledge, and provide explanations and any necessary receipts to verify the claims. But what happens when other people who work on your home make a discovery that could render the home undesirable?

The most recent case, RSB Vineyards, LLC v. Bernard, was upheld by the California Court of Appeals. The court ruled that a seller must have had ACTUAL KNOWLEDGE to be held liable for non-disclosure, and a contractor’s knowledge is not imputed to the seller. In lay terms, this means that if a seller hires a contractor to do work, and the contractor discovers something about the property, the seller cannot be held liable unless the seller was made aware of the problem by the contractor.

In the lawsuit the contractor had converted a residence into a wine tasting room on vineyard property that was later found to be structurally unsound – the buyers found out after they purchased the home and had to demolish the structure. They sued the seller for failure to disclose. The contractor was found to have known about the problem but there was no “actual knowledge” by the sellers.

In many areas of disclosure here in California, the seller CAN be held liable for items about which they should have known. For example, if the sellers notice water stains on a ceiling of a room and do nothing about it, then have the ceiling painted prior to sale, without disclosing the stain…this would likely render the seller liable for failure to disclose, as the water stains obviously indicate some kind of problem. Note that had the seller disclosed the stain and not painted over it, s/he would not be liable. It would then be up to the buyer to investigate and ask for repairs if problems were discovered.

If you are selling a property it is very important to answer ALL questions on the disclosures to the best of your ability. Back up any claims with receipts, documentation, etc. I always tell my clients it is better to over-disclose. Put everything out there so that you do not have to worry about liability down the road. If you are made aware of any issues by a third party, make sure to include that in your disclosures so the buyer can look into it further.

If you are ever unsure of whether or not to disclose something, the rule of thumb is that you should do so. However, I suggest obtaining legal advice…or if your real estate agent happens to be an attorney that could help too 🙂

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How Much Commission Will You Charge to List My Home?

Thursday, March 31st, 2016

Today I received an email from a home seller who found me online and wanted to know how much commission I would charge to sell his home, without meeting me or having me see his home. I have had this question before, and it got me thinking. Many sellers want an answer before an agent even meets them or sees their home, and this is a bit challenging. Of course, commissions are negotiable – some agents will lower them and others will not, and some may even have a set low number they’ll provide before seeing your home or meeting you. images

While a low commission will save you money, here are some important points all home sellers should adhere to when selecting an agent:

1. Understand what the agent will do for you. Full service and partial service brokerages vary a great deal, so make sure you know what you are “getting” for the low commission an agent has proposed. Will your agent provide:

– Professional photography

– Custom color flyers

– Marketing – online, print, social media, etc.

– Showing tips and staging (if necessary), as well as referrals to service providers that may be needed

– Broker caravan tour

– Open houses (if desired)

– Take calls and show the property

– Vet potential buyers before accepting an offer

– Communicate with all parties involved in the sale – escrow, title, lender, buyer’s agent, inspectors, repair people

– Handle all paperwork, including disclosures, amendments, repair requests and contingencies

– Negotiate with the buyer – it is important to note that getting a contract accepted is only the beginning. There is still negotiating to be done (unless the buyer agreed to purchase as-is and has no contingencies). Many sales fall through because of a weak negotiator, so make sure your agent is going to be there to do so.

– Keep the buyer in the sale – this really is similar to the point above, but a little different. Sometimes a buyer may discover something that makes him/her uncomfortable, so it is important to have an agent who can think outside the proverbial box and lessen those anxieties.

2. Understand what the agent will NOT do for you. Make sure you have a clear idea of what will not be included in the commission – some low commission brokerages only list your home on the MLS and leave it at that. If you run into any negotiations – over price, repairs, etc. you need to have a strong negotiator on your side or the sale may fall a part. Make sure you know your agent’s role.

3. Understand YOUR role in the sale. Again, if you hire an agent who is pretty much just placing your home on the MLS, you need to understand it may be your responsibility to hold open houses, let agents in and schedule showings, and provide all required paperwork. Some people don’t mind doing these things, but others don’t have the time nor want to be bothered with them. Also, if during the course of the sale bumps arise in the road, it is important to have someone to rely on for advice. If your agent is not going to do so I strongly recommend having an attorney in your corner – of course this will cost you extra money so look into it first.

The bottom line is that pretty much everyone wants a “deal.” Since commissions are negotiable there is a good change sellers will find one if that is what they are looking for, but keep in mind that selling a home is a legal transaction, one for which there could be liability and potential lawsuits – even long after the home has been sold. Saving money is nice but when it comes to legalities personally I would rather know that I am protected in the best way possible, and if that means spending a bit more I wouldn’t mind – often in life you get what you pay for. You have to decide what you think is important.

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Should I Buy/Sell Real Estate Now, or Wait Until Spring?

Monday, November 30th, 2015

Winter is a busy time of year for people – the holidays are here and there are so many things to accomplish before the end of the year. You may wonder how people think about real estate at such a busy time, but believe me they do! Many wonder whether it is a “good”time to buy or sell a home now, so here are some things to consider. house_question

Buying a Home at the End of the Year

1.  Less inventory to peruse. There is typically less inventory to see at this time of year, as busy homeowners focus on holidays and accordingly wait to sell or take their homes off the market.

2. Serious sellers could = lower prices. Those who do have their homes on the market need or want to sell, and are not deterred by the holidays and slower traffic. This is a great situation for buyers, as they may be able to negotiate better prices.

3. Less Competition. With fewer buyers out looking at homes it makes it a great time to be a buyer.

Selling a Home at the End of the Year

1.  Less competition inventory. There are typically fewer homes on the market during the winter/holiday season, so it is a great time to market your home.

2.  More serious buyers. Unlike summertime, when there seem to be a lot of “looky-loos,(especially if you live in a beautiful area like San Diego where there are a lot of summer tourists) ” buyers out looking at homes at this time of year tend to be more serious and ready to purchase.

Buying a Home in the Spring/Summer

Buyers who wait until Spring to start their home searches tend to encounter:

1.More inventory to choose from

2. More buyer traffic, which could mean more competition and multiple offer situations

3. Prices tend to be higher

4. Shorter market times, which means less time to really look around and make a decision.

Selling a Home in the Spring/Summer

1. More inventory on the market, thus more competition

2. Prices tend to be higher

3. A larger buyer pool

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The best time for you purchase a home will depend on many things. Make sure also to check with your accountant to see if there are any benefits for you that could affect your purchase window.  Whenever you decide to purchase, make sure you do your homework and contact an experienced agent to assist you. Happy shopping!

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