Home buying: Don’t overlook disclosures

In the midst of the current booming real estate market, the rush to buy or sell may result in overlooking a number of very important issues.

With homes selling above the asking price, the urgency in closing a deal may result in missing potentially costly problems that come to light much later.

Buyers should pay close attention to the disclosure documents provided by the sellers

Sellers are required to provide buyers with a Residential Property Condition Disclosure Report. This report contains eight sections and a total of 57 questions including, but not limited to, the age of the property, the mechanicals and systems on the property, potential municipal designations and many other structural details regarding the property.

Is the property, for example, in a historic district or listed on the National Register of Historic Places? Is there any leased equipment on the property? Are there any assessments?

Sellers also must disclose if there was a buried oil tank on the property, even if it was disconnected years prior. If the seller has no knowledge, they are able to answer, “Unknown.” Major problems that have been repaired also must be disclosed — a roof, for example, or septic repairs.

The seller has an opportunity to explain the extent of the damage and how the damage was remedied. If, for example, there has been any seepage or water in the basement, the seller can note the frequency and has an opportunity to explain the remedy, if one was needed.

What if you move into your new house and find serious problems that were not disclosed before the sale? What can you do? You are not stuck.

The Connecticut statute governing the disclosures allows for civil action against the seller if they failed to disclose a defect — if the defect should have been mentioned in one of the eight sections of the disclosure report.

There is, however, nothing in the disclosures regarding some potential questions for a buyer. Does a neighbor have a constantly barking dog? Do they like to mow the lawn late at night?

With today’s market being so hot, it would be wise for sellers to drive by the target house in the morning, during the day and at night to try to get a feel for the neighborhood.

Once the purchase/sale contract is signed, a licensed home inspector typically is hired by the buyer to go through the property to identify potential problems. If a structural issue is identified, then an independent engineer’s evaluation might be needed.

The contract should specify a contingency date for the inspections and set out a timeline for reporting the findings to the seller.

Even in this hot real estate market, going too fast could result in the buyer getting burned. Investigate before you celebrate.

Kohn