One of the biggest concerns for buyers is getting full disclosure from sellers.
Obtaining full disclosure as a buyer helps them understand the current condition of a property, previous work done on a property, and anything else that may impact the home and the buyer’s finances involving the home in the future.
It’s the seller’s responsibility to disclose this information.
Minchella & Associates works with buyers, sellers, and brokers across Illinois and surrounding areas. One of their areas of concentration is cases dealing with full disclosure from sellers.
Buying from Entities Other than Homeowners
There are a lot of non-traditional home sales across America these days.
Properties can be bought from house flippers, LLCs, corporations, and other entities that aren’t physically living in the property prior to the sale.
The issue here is that these entities, having not resided in the home, don’t know the details of its condition or work done. This sometimes happens in cases of homes being sold by the children of a deceased property owner.
One of the more problematic sellers in this arrangement is a house-flipper. They come into a home that requires some work, give it a fresh coat of paint, replace appliances, and update HVAC systems. The home looks sparkly and new, but there could still be underlying problems or past work that needs to be disclosed.
Buying Without Full Disclosure
Without full disclosure of issues with a house, a buyer is basically walking in blind.
The home looks nice, but there could be issues with the foundation, roof, or attic that require repairs that are hidden behind new walls, construction or other manner of misdirection. It can be devastating to a new homeowner to have to make repairs they were not anticipating.
In cases of an LLC selling a property, or even the heirs of a deceased homeowner, once the sale is made, it’s hard to track down the sellers for further comment. This is where it becomes increasingly important for buyers to obtain a thorough inspection of the property. It is also important that the buyers’ attorney explain the risks of buying from a party who will not take responsibility for the condition of the property after the closing. A property that is owned by an entity that has named the ownership the address of the property (e.g. 1234 Main St., LLC) will likely sell the property, take the proceeds and dissolve the LLC. Unless a fraud has been committed, there is nothing the buyer can do about any failed disclosures.
House Flips
House flips are a common area for full disclosure problems to arise.
Not all house flippers are looking for a quick buck. But, it remains that some flippers go into a sale with the hope of spending as little as possible on a property and selling it for a high profit.
When this happens, houses are often purchased as-is. These as-is properties need work but rarely see the kind of upgrades necessary. The buyer is then left with a property that seems in good shape but isn’t. This is where an inspection or full disclosure of the past state of the property is necessary. It shows buyers what the seller has and hasn’t done to repair the house, and what might be issues once the buyer takes ownership.
Disclosure Forms
Disclosure forms state the condition of the property, but sellers who haven’t lived in a property do not have to report on anything other than what they actually know about the condition of the property.
There would be no knowledge of past basement floods, leaking roofs, or cracks in the foundation. They only know what they see when they take hold of the property for sale.
It’s important for buyers to analyze the disclosure form and have a thorough inspection before committing to a sale. Working with an experienced real estate attorney can help buyers navigate this process.
Getting full disclosure from sellers is essential for making an informed decision when buying a property. Home buyers will do best to work with an experienced real estate attorney.
