National Real Estate Exam: Property Disclosure

latent defect

a hidden property condition not likely to be found through a general view or inspection

material fact

affects a buyer's decision to buy a given property. Different information will be weighed differently based on the buyer. may have more or less effect on a buyer based on the buyer's needs and values.

caveat emptor

buyer beware states; not full disclosure states

adverse material fact

negative property information that could reduce property's value

lead based paint

properties built before 1978 must provide a lead based paint disclosure and EPA produced "Protect your family..." lead safety pamphlet to the buyers Seller must disclose any known lead based paint or prior test results

inspection report

property of the buyer. report can only be released with buyers permission typically choose not to view report if sale falls through because of it typically no obligation to share prior inspection reports with new prospective buyers

property line location, encroachment, easements

- On site survey can indicate property line, encroachments, and easements - property's deed and title history should list known easements

presence of pests

- common wood eating pests: termites, carpenter ants, powderpost beetles - mud tunnels in walls indicate termites - carpenter ants leave behind a sawdust material (frass) when they burrow through wood - may small holes through wood beams could indicate powderpost beetles

structural issues

- discolored or curling shingles, water buildup in gutters, water damage along the fascia, cracks holes or rots in the soffit - missing, cracked, displaced roof components - creosote build up on the exterior of the chimney, drafts near fire place, cracked or sloping hearth, loose crumbling bricks - cracks in foundation or basement walls, moisture in basement, misaligned doors/windows, separation around garage doors - soft or uneven floors - discoloration in attic or around windows/doors

Property Condition: Home Inspections

- licensee's should always encourage home inspections - home inspection contingencies is the best way to protect buyer's earnest money - some states require the licensee to disclose Material Facts

interior environmental hazards

- radon; occurs naturally and can be found in soil and well water - asbestos; a fibrous material that becomes dangerous when it deteriorates. Can cause lung damage over time - mold; promoted by excessive moisture and lack of air circulation - lead; can be found in paint, plumbing, dust, soil, and drinking water. Causes many health issues most prevalent in infants, children, and the elderly.

electrical plumbing and other issues

- rooms that are too hot/too cold, furnace that won't turn on when adjusted - electrical switches that are warm to the touch - water damage on ceilings or walls - leaking or clogged drains, soggy around homes - galvanized plumbing pipes corrode and rust over time -

Various land/soil conditions

- standing water present for more than 24 hours after rain may indicate drainage problems - mulch mounded against a house/wood siding can lead to wood rot - a sinkhole or settling may be a sign of mine subsidence, underground storage tanks, or other buried hazards - vent pipe sticking out of the ground is also an indication of an underground storage tank - soft spots and mounds may indicate the property was used for waste disposal

environmental issues

- underground storage tanks - groundwater contamination - the presence of former waste disposal site - mining activities - use of agricultural pesticides