The following post was originally written in reponse to the following question posted on LinkedIn.  I have left the original question in unedited form:

Effects of Disclosable issues on Real Estate Value: If a home has had issues with its foundation and plumbing what are the likely effects on market value. Foundation issue consisted of a slab crack down the center of the foundation (builder sealed) and plumbing consists of the need for complete replacement of the sewer line under the slab (builder will repair). These are disclosable issues and I believe would have a negative effect on value. Question is do I have a reason for concern?

The problem with your question is that you have said whether you’re buying or selling. You also haven’t indicated where the property is located.

As to your actual question, “Do I have a reason for concern?” I’d guess that if you have anything to do with this transaction, then yes you do have a “cause for concern.” If you’re buying you have reason to be concerned about whether you’re buying a lemon, and if you’re selling you have a reason to be concerned about being sued if your disclosures are not accurate and complete.

Assuming you’re a seller, you don’t need to get all bogged down with latent and patent defects, etc. Don’t over-think it. You have a straightforward obligation to disclose what you know, the goal of which is to shift the risk to the buyer so that they can make their own INFORMED decision.

Will it affect value? Of course it will. Should you hire an attorney? Without a doubt. You need an insurance policy and good legal advice will provide a form of that. Don’t rely on your agent; they have a financial motive to encourage you to lie, as a breed, they have no understanding of legal liabilities, and–in most cases–they’re not likely to be on the hook for your disclosure sins. And it’s no defense to say that you relied on legal advice from a real estate agent.

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3 Responses to Seller’s disclosure obligation in a sale of residential real estate. (LinkedIn Q&A)

  1. Thanks for your post. A little off topic but some of the links were not working on your site. Either that or it’s on my end. I’ll subscribe to your feed for updates

  2. Thanks. It’s hard to keep up with the links sometimes, which is why I try to download and link to an internal reprint.

  3. Howyadoin’?

    Just landed on your website while looking on concrete and construction. It’s a messy situation, this economy that we all seem to sink with it with.

    Anyway, I just installed this new browser, Opera, Firefox, Mozzila, Safari and I have to learn a way to subscribe to your site here, but I get some weird message when I hit the feed button. Any Ideas?

    Take Care

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