Neither buying nor selling a house is a cakewalk. Many a times, people buy a house and discover a major problem with the property after some weeks or months. Now imagine that you are the seller of this property and the angry buyer comes back to you accusing you of fraudulently induced transaction. What will you do?
It would be beneficial to know about the rights and obligations of both buyers and sellers before closing the deed. Also, in case of contract for deed it is important to know about all the hidden costs well in advance.
Find out which information should be included in the disclosure form:
Law requires the seller to disclose all structural, environmental, or neighborhood related issues at the time of home sale. Do you know that the rules in California are further more stringent, as they require the seller to disclose full and complete information of all material matters which may affect the buyers desirability for the house. This is a broad definition and can include prior insurance claims, prior deaths inside the home, noises in neighborhood, damaged appliances, and many other things.
This important disclosure will facilitate ease of contract deed tax treatment in future:
Under a contract for deed the purchase of property is financed by the seller and the buyer makes regular payments to the seller until the amount owed is paid in full. The legal title of the property is retained by the seller until the buyer makes full payment. The seller should reveal if the buyer is responsible for property tax payments and insurance of the house and weather the contract for deed includes balloon payment.
What are the rights of a home buyer?
A buyer can seek compensatory and punitive damages after establishing a claim against the seller for intentional misrepresentation, concealment, and non-disclosure. The merger doctrine, prepared at the time of closing the deed, does not allow a buyer to return to the seller after a transaction has closed. However, it has an exception for fraudulently induced transactions. Hence, if the issue that has come up lately is not mentioned in the disclosure form, the buyer has every right to go back to the seller.
Home buyers can take these proactive steps to save thousands of dollars in future:
- Buyers should take full advantage of the inspection period provided to them by the sellers
- They should spend now to get the house thoroughly inspected and hire specialized people for it
- The electrical, plumbing, foundation, roof and septic system of the house should be properly inspected
- Also check the flood zones, road access and utilities to the house
- If anything hidden is discovered in time, the buyer can negotiate with the seller to give credit against it or fix it before closing the deed
One can surely avoid losses as well as headaches in future if little due diligence is exercised beforehand. And even after taking all the above measures if you still come across any issues, our expert real property lawyers at LawTally are well equipped to guide you.