Let’s talk a little about the real estate market. In order for the real estate market to recover, people will have to go out and buy homes. When the market is down and selling a home is more difficult, homeowners struggle with how much to disclose about the property. Consider this scenario:
The property has been listed for 200 days with no takers and the list price has been knocked down twice already. Finally, the homweowner gets a bite, someone is interested. An offer is made and it is below the already twice reduced list price, but the homeowner is so disenchanted with the process and desperate for a sale that the offer is accepted. Now comes the important part, the disclosure period when all of the ins and outs of the property are revealed to the purchaser. But what does the homeowner tell them? He or she doesn’t want to tell them that some unpermitted construction was done on the property, or that the roof leaks, or that 5 years ago the plumbing system failed and flooded the house and no remediation efforts were undertaken.
Any one of those disclosures could cause the purchaser to request a reduction in the purchase price or, even worse, cause the purchaser to walk away from the property.
So what does the homeowner do? The answer: ALWAYS DISCLOSE EVERYTHING
The California Civil Code requires that anything that might materially affect the value or desirability of the property must be disclosed. Who should make that decision? My suggestion, it would be easier to disclose everything than try to convince a judge or jury that the piece-meal electrical system that was rigged in the kitchen was not material. My rule of thumb, then, disclose, disclose, disclose…
Back to the more important issue. I haven’t asked for too much audience participation, but I would like to know at least who is out there. So do me a favor. If you are reading this, please reply to this email in some fashion. It doesn’t have to be much, even just a “yes” would suffice. But I just want to know who is reading.
Have a great week and when in doubt, disclose.