Can a seller lie to you?
A lot of buyers wouldn’t put it like that, so bluntly. But most buyers want to know if sellers are required by law to tell them the truth about a house or property on market.
You would think the answer is an unqualified yes. But it’s not. How to protect yourself?
The law requires a seller to disclose material facts about the property – whether the roof leaks or appliances are broken, whether remodeling was done without required permits. But aside from specific questions included in the required disclosures form, it doesn’t define what is meant by “material” and sellers can always claim they didn’t know a fact – the onus is on the buyer to prove the seller did in fact know it and concealed it.
Other facts –those that are evident simply by looking – are not required to be disclosed. For instance, a seller does not need to tell you that there’s a train that rumbles by the house twice a day if you can clearly see the tracks.
Which is why disclosures, required or not, are not reliable and don’t take the place of old-fashioned inspections and records checks. What inspections should you get? What records should you check? The answer: It depends – on whether the property is new construction/vintage/remodeled, whether it’s acreage, a raw lot with a crop on it, or a multiplex. Example: An old house might have an underground oil tank – why do you care? You’ll care if it’s leaking into the soil because Your future buyer, once You sell the house, could require you to expensively remediate the spilled oil. So yes, you should check for an underground oil tank.
Acreage has concerns of its own – zoning restrictions, septic and well issues. Vacant property next door? What could happen on that land on the future? A nice, big two-story house to block your view?
Does a seller have to tell you about the existence of other offers or – the most recent question I received – is a seller required to tell you how much he still owes on the house? Answer to the first question is no, but most sellers will want you to know there are other offers so that you can potentially beat them. The second question is: no, and it doesn’t matter. No, sellers are not required to tell you anything about their personal finances. However, it’s easy enough to find out how much the mortgage was when the property was acquired and then reverse engineer the math. It doesn’t matter because the seller doesn’t have to sell you the property solely for the mortgage debt, and likely won’t. However, in lean times, it is good to do the math to see how close the sale is to being short if you offer low.
Consider your purchase to be an investigation, and you’ll be on the right track.
If you do it right (hint: Get a Realtor!), you’ll find out everything the seller didn’t want to tell you anyway.
