Real Estate Lesson 6: Property Condition and Disclosures

The inspection Clause

This clause within the purchase agreement usually allows alternatives for the buyer if the property inspection exposes unsatisfactory conditions on the report. · Options for the buyer will generally include a request for repairs to be made by the seller, a monetary agreement whereby the seller will provide cash to the buyer at closing for repairs,or most importantly the buyer will usually have the option to cancel the contract and declare the purchase agreement void. · As the real estate agent you should pay close attention to the details of the inspection clause, and ensure that your client understands their rights and responsibilities relative to this clause within the purchase agreement.

New home warranty

This type of warranty is usually reserved for newly built homes, and are often backed by the builder or purchased by the builder through an independent warranty company. In many cases, such as new homes with an FHA or VA loan, a new home warranty may be required to be purchased by the builder as a part of the transaction. In addition, several states have passed their own independent state laws which require new home warranties to protect buyers in their purchases of new construction.

Home warranty

either the buyer or the seller can purchase a home warranty policy through an appropriate insurance provider which provides several protections to the buyer after the sale. A home warranty will typically cover important aspects of the home such as plumbing, electrical, air conditioning, and major appliances. Warranties, as with most products, can come with various coverage options in terms of cost as well as time. A typical home warranty can last anywhere from 1 year of coverage to possibly 5 or more.

Latent defects

is a hidden defect so severe that the buyer probably would not have purchased the house or would have paid a lesser price had him or her known. In most states a period of time is allowed for the buyer to sue the seller for latent defects. Some states have redhibition laws that allow the buyer to give the house back to the seller and get their money back if they can prove the property has latent defects.

Psychologically impacted property

is a property where there has been a serious crime such as a murder, and this information is generally not required to be disclosed to purchasers in most states. Whether or not a buyer, seller, landlord, or tenant is HIV-positive would be illegal to disclose under federal law. Ghosts are not legally considered to be a material fact in most states, and can be left up to the discretion of the parties on how to handle (or market).

Sellers are generally liable to a buyer for ________ defects in the property. Generally sellers are not liable when defects are disclosed. This is why property condition disclosure statements and property inspection reports are so important.

known and unknown,

What does a property disclosure do for the agent

· A disclosure form helps indemnify the agent by disclosing the property condition and known material defects to the buyer. It will have the same indemnity protection for the seller against known defects since they were disclosed. Property Condition Disclosure Forms will not indemnify the seller against unknown defects, since the seller may still be liable for those unknown defects to the buyer depending on state law and the wording of the contract.Disclosure forms do not indemnify the agent or the seller against fraud.

Property disclosure form

· is one of the most important documents we use in a real estate transaction. In fact, for the protection of the agent against lawsuits, it could be argued that it is the most important document. Many of the lawsuits filed over a real estate transaction deal with the condition of the property at the time of the sale. As real estate agents, we use this form, and the signature from the seller, to prove that we are transferring this property in the condition as disclosed to us by the seller.

Is an inspection required

A home inspection, or any property inspection, is not usually required by law in order to complete the real estate transaction. However, due to the cost and complexity of a real estate transaction it is usually highly advisable and may dramatically reduce lawsuits and issues between the parties.

Material Facts:Need for inspection and obtaining / verifying Information

In the modern real estate transaction, there is oftentimes a standard clause within the purchase agreement which allows the buyer a period of time whereby they may hire a property inspection expert of their choosing to inspect the property for sale and provide a detailed report.

Home inspection

In the modern real estate transaction, there is oftentimes a standard clause within the purchase agreement which allows the buyer a period of time whereby they may hire a property inspection expert of their choosing to inspect the property for sale and provide a detailed report. This type of property inspection is usually called a home inspection and involves a state licensed or certified home inspector who is trained in this particular area of expertise. The home inspection is generally paid by the buyer, and provides an excellent opportunity to compare the home inspection report with the property disclosure provided by the seller to identify any crucial issues which may need to be further evaluated or may have been omitted from the disclosure altogether.

The inspection Clause: Options for the buyer

Options for the buyer will generally include a request for repairs to be made by the seller, a monetary agreement whereby the seller will provide cash to the buyer at closing for repairs,or most importantly the buyer will usually have the option to cancel the contract and declare the purchase agreement void. · As the real estate agent you should pay close attention to the details of the inspection clause, and ensure that your client understands their rights and responsibilities relative to this clause within the purchase agreement.

What the property disclosure form covers

The Property Condition Disclosure Form covers all major aspects of the house and its condition. a) This would include the roof, electrical, plumbing, foundation, interior, exterior, air conditioning and heating, major components (a/c, dishwasher, etc.) and the like.The form will also disclose whether or not the property has had and/or repaired such things as termite damage, flood damage, fire damage, earthquake damage and whatever else is likely to happen depending on the area of the country.The seller, on the disclosure form, will acknowledge that the condition is not present, is present, was present but has been fixed, or the seller does not know the answer.