By Jason Robie
Buying a home can be a bit like the beginnings of a dating relationship. The initial meeting might be an open house so there are other people around to take the pressure off. This allows you to just dip your toe in the process and see if you are even interested.
The next step is an actual one-on-one connection where it is just you and your date (and probably a real estate agent). For this step you really start to ask questions and get to know your potential match. If all goes well at this stage, the real fun begins. This is where you really start to dig deeper and get to know if there really ARE skeletons in the closet.
I think it is safe to say that we all put on our best face when we are on that first (or first couple) dates. We eat with a bit more civility, we search our memories for all of those manner rules mom taught us and we may even open a door or two.
In general, we don't want to misrepresent ourselves, but we do want to ensure our new friend that we have the capacity for good conversation and behavior. It is not until a few weeks or months later that some of the more "real" behaviors start to creep in.
With a home purchase, this game tends to be prevalent from the seller's perspective as well. If you think the listing you just visited is always that sparkly clean, you're delirious. But there is a fine line between putting on a fresh face for the potential buyers and misrepresenting the material facts of a home.
Today, I'd like to explore a few of these subjects and talk about how best to walk this line. In general we want to be upfront and honest when selling a home. Just like with dating, your partner is eventually going to find out that you are human and have faults. The key is to be sure you are not maliciously hiding the fact that you're an ax murderer!
Speaking of ax murderers, you almost always need to disclose the fact that there was a death in the home while you were living there. Some states narrow that down to murders or suicides but you'll want to check with your real estate professional to be sure you are doing the right thing.
While this may seem like a deal-breaker, some people either simply don't care or they are even intrigued by the notion of a murder in the home. In either case, you don't want to have this fact come back and haunt you. Like with any of the items we're going to talk about today, honesty is always the best policy.
As the saying goes, the only two sure things in this life are death and taxes. We are going to focus on the latter. Not taxes specifically, but money owed to other people or "liens" on the property. When you are selling a home, your personal financial situation is none of anyone's business.
The fact that you "need" to sell to pay off debt or that you are "under water" with your mortgage is wholly your own personal information. In fact, any real estate professional will tell you to keep that information entirely to yourself.
What is not only your business is the lien(s) on the property. If you owe back taxes or a contractor has placed a lien on the property because of unpaid bills, that information is going to have to be presented. Your personal finances are nobody's business but your own, but information that will directly impact the value of the home and certainly the mortgage process needs to be disclosed before things get too far down the road.
Speaking of contractors, it is always a good idea to be up front about any repairs or remodeling projects that were done to the home or property. "Material Defects" is a term that gets tossed around a bit in the real estate world.
"It is important that you disclose anything that you know is truly 'wrong' with the property to both your real estate agent and the potential buyers," Badger Realty agent Ben Jones said. "This is not only an actual law in New Hampshire, but it is also just the right thing to do."
Beyond that, of course, what you disclose is at your discretion. Personally I would sleep better at night knowing that I have told the buyers everything I know about the property. My last sale was of my newly constructed home so there was nothing to disclose. Older homes around New Hampshire are certainly going to have their own colorful histories. Honesty is the best policy here.
Lastly, for all you "Breaking Bad" fans out there, is the meth lab disclosure. In most states (although not Kansas?) it is required that you inform the sellers about any meth lab activities that took place in the home. I don't know all the nitty gritty details about why, but I'm fairly certain it has to do with the remnants of the cooking process lingering and being potentially toxic to any new occupants. Much like the material defects or repairs note from above, this is often the law but is always a good practice.
Disclosures are an important piece of the puzzle for buyers' evaluation of a home. There have been numerous court cases where buyers were able to back out of a contract and get their deposit back because of the seller's practice of hiding information about the property. This not only costs time and money but also leaves a bad taste in the mouth of all of those involved. When it comes to disclosures, be honest and up front and then let the chips fall where they may. You'll appreciate the peace of mind it brings.