About 30 states have disclosure laws that require sellers to tell prospective buyers about any problems, but in this tough market, some sellers aren’t as forthcoming as they should be.
Here’s a short list of white lies and misrepresentations that real estate practitioners and regulators say are common and that buyers should be wary of as they shop for a new home:
- This room and this lot are really big. Some sellers are inclined to exaggerate, but smaller dimensions can result in a lower appraisal, the leading cause of scuttled deals. New York real estate attorney Michel Xylas recommends a carefully worded appraisal contingency in the purchase contract.
- There has never been significant damage from a disaster here. Buyers can find out a home’s history of property damage by buying a report from the Comprehensive Loss Underwriting Exchange (CLUE).
- Taxes and heating costs are low. Ask to see recent bills and get up-to-date information from the tax assessor’s office. Look for unrecorded improvements like decks and finished basements.
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Source: The Wall Street Journal, M.P. McQueen (01/14/2010)
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