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Is The Seller's Disclosure Statement Really That Important?

Thursday, November 30, 2017   /   by Keri McCombs

Is The Seller's Disclosure Statement Really That Important?

Recently, I worked with a buyer who was purchasing the home she will likely live in for the remaining years of her life. She wanted something that would accommodate her as her health declines in the years to come, yet something she could make her own and be proud of after life threw a couple of unwanted curveballs her way. Right before closing, she found water seeping into the basement through a crack in the foundation. She knew the crack had been there all along, and when we first saw the house, we saw evidence of water deposits on the wall, as if the crack had leaked before. Yet nothing had been disclosed in the seller's disclosure statement of any defect in the foundation or any leaks in the basement.

Here's How It Played Out:

The buyer swore that the seller knew about this issue all along and were not honest about disclosing it. The seller reported rarely using the basement, and the room where the leak in question happened was filled with lots of the seller's belongings, covering almost every square inch of the floor, making it possible to not notice a leak ever happening. In the end, buyer and seller came to an agreement and the house sold to my buyer, however it was a very rocky end to the transaction.

So How Could This Have Gone Differently?

By nature, I am an analyst. I think of all possibilities and how to create plan B (or C or D or E...) when plan A presents a roadblock. That is part of why I love real estate; there are no two transactions ever the same. Every situation is different. So, to answer the above question, there's no right or wrong answer; there are only other options that would have protected buyer and seller and lessened the stress that came out at the end of the transaction.

Honesty Is The Best Policy

My sweet buyer agonized over the truth of the matter- did the seller truly know if there was a water-leaking issue or not? We will never truly know if the seller was aware of the issue or not, and I don't intend to spend time on wondering that. However, "honesty is the best policy" is such a true statement. I used to think that if a buyer knew all of the issues with a house, meaning if a seller was truly honest with them, that it would deter the buyer and cause the sale to fall apart. What I have learned is that buyers actually WANT honesty. They want to know the nitty gritty. Not necessarily because they'll back out of the purchase, but because they value when sellers are transparent. Lack of transparency can leave a bad taste in the mouths of buyers, which can sour the whole transaction. Trust me, I've seen it happen. It's not pretty.

Have Realistic Expectations

When you go to a fast-food restaurant and order a burger, you don't expect the burger to be of the same quality as a burger at a five star restaurant, and vice versa. (Although sometimes those mom and pop dives have the most scrumptious burgers on the face of the planet!) But you get the idea- you generally have a set of expectations that are realistic for what you're buying.

The same goes in real estate. In the case of this house, it was not a brand new house; it had wear and tear. There were foundation cracks that were quite noticeable from the get-go. It broke my heart for my buyer that this would be something to deal with at the start of this new chapter of her life, yet it was realistic to expect that something like a minor leak in the foundation could happen. I myself must constantly be reminded of realistic expectations; I would love to create a perfect house for each one of my clients- I think they deserve it! And I know that things will come up-it's one of the aspects of homeownership (new house or not). Yet, we don't live in a perfect world and sometimes it takes reminding ourselves of what is realistic and how does that compare with what we want.

Like this situation, each real estate transaction brings about something new for me to learn, as a benefit in how I serve my clients and as a benefit in how to better operate my business. I trust you found this article useful! If you have any questions, don't hesitate to reach out to me directly at (509) 844-5843. Thank you for reading!

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