Buying And Selling a House: The Seller’s Obligations
September 15, 2015
One of the benefits of using a real estate agent, is that they can provide you with many of the forms you will need to sell your home. For example, you must supply potential purchasers with a disclosure statement about your home. The disclosure statement requires you to tell potential purchasers as much as you can about your home, including, for example, the date the last roof was installed and the warranty on that roof, the age of built-in appliances, whether you have had any drainage problems in the basement. The disclosure statement covers about five pages, and requires a great deal of information.
You should be careful in completing the disclosure statement. You are giving it to potential purchasers, signing it at the end, and representing that all the information contained in it is true to the best of your knowledge. If a buyer purchases your home and later learns the information is incorrect (when he calls the plumber to replace the hot water tank he learns that it was installed in 1980, not 1995 as was stated in the disclosure statement), the buyer could sue you for fraud (deliberately misleading the buyer in hopes the buyer would rely on the misinformation). I was recently involved in a situation when the seller claimed on the disclosure statement that he had no knowledge of any stability problems with the back porch. When we reviewed the seller’s inspection report from when he had purchased the home, it clearly stated that the back porch steps had separated from the porch itself. In another case, the disclosure stated that there were no drainage problems with the property, but when the basement was flooded after a particularly heavy storm, my client discovered that the paneling installed in the basement by the seller a year earlier covered evidence of repeated water problems. If an action in fraud is filed, the buyer may be able to recover not only the cost of repairing the problem you misrepresented, but also punitive damages and attorneys fees.
If your home was built before 1978, you also have to supply the buyer with a lead based paint disclosure statement and a printed booklet about lead based paint and how to remedy situations when it is present. This statement requires you to disclose any information you have about the presence of lead based paint on your property, any studies you had performed to determine if lead based paint was present, and any remediation steps taken if you learned lead based paint was present.
Another form you will need is an agreement of sale form. Realtors in Pennsylvania have an agreement of sale form they prefer to use in all transactions. This multipage form is not one I prefer, but if you are using a real estate agent, it is difficult to convince them to use another form, though you should try. The agreement of sale, whether the preferred realtors form or one of your own choosing must detail the terms of the agreement, identifies the parties (making sure the buyer’s name is the one they want used on the deed), identifies the real estate being purchased, stating the purchase price and how it will be paid (how much down, any interim payments, the amount to be paid at closing, the amount the seller may be financing), lists any personal property to be sold with the real estate and the price for that personal property, and states when closing must occur. Many other provisions are included that are typical in a real estate transaction, but cannot be listed here because of space concerns. If you are not using a real estate agent, you should consider using a lawyer to draft or at least review the agreement of sale to be sure it complies with all legal requirements and will be enforceable.
Author: Bernadette L. Puzzuole
Articles are not intended to be comprehensive. Readers should not act upon any information herein without seeking specific legal advice from the Firm’s attorneys.
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