Buyer Beware: How Home Buyers Can Avoid Buying a Liability
Home hunting is often very frustrating. This true horror story of home buyers suing their real estate agent for $2 million after discovering that their home was infested with snakes is a cautionary reminder that all home buyers should take the necessary precautions to ensure that they too are not buying a home infested with snakes, or worse. So buyer beware. This blog post is intended to help home buyers avoid buying a liability.
- Know Your Contract. Too often a property is listed for sale “as is.” You should understand exactly what is meant by the “as is” nature of the transaction. As will be discussed below, if you are buying an “as is” property, then it is important to conduct the necessary due diligence at the property to ensure that it is structurally sound and safe before you actually buy it.
- Know Your Lender’s Requirements. Some lenders are very strict. They won’t lend you money to buy the property if the property has problems. For instance, if the property has a leaky roof, or radon gas, then your lender may require you to correct those issues before you can buy the property.
- Know Your Property and Seller. In this day and age just about everything is on-line. Use the internet to find out as much information about both your seller and the property itself. For instance, if the property recently had an 800-foot addition added, then check the county records on line to confirm that the addition was built with the appropriate permits.
- Know the Seller’s Disclosures. The seller’s disclosures are intended to inform the buyers of known defects with the property. This is often known as a “latent defect.” But what happens if a defect was either not known to the seller or the seller failed to disclose a known defect to the buyer? The answer to this question is often buried in the fine print of your real estate sales contract. And the answer to this important question is something the buyer should find out prior to completing the real estate purchase.
- Get a Home Inspection. A home inspection is a lot like driving a car, only better. A home inspection should reveal every issue/problem that may exist with the property, if any. Home inspections can cost several hundreds of dollars. But that is money well spent as the home inspection may reveal a serious issue that will need to be addressed at a later date. Issues revealed during a home inspection may also be serious enough that a home buyer may actually need to walk away from the transaction.