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Mandated but different from state to state.
Some allow a lot of don't knows, some are more specific.
^^This.
The **intent** of them is to impose a level playing field.
This should benefit and protect the uninformed and inexperienced buyers most.
Sometimes it actually does.
But if you're in a state with other laws that are not typically oriented toward
this sort of transparency and consumer protection (and maybe even then too)...
assume that everything being told to you by anyone involved in the transaction (written or verbal)
to be an obfuscation if not an outright lie unless and until you have your own evidence to the contrary.
It (the form) is essentially a formal way of complying with our legal requirement to disclose known defects that materially affect the value of the property but are not easily seen by the buyer. We have a state form but some brokers use their own. In my view, it benefits both the seller and buyer...the buyer learns more about the property and the seller (who is honestly forthcoming) protects him/herself from losing a potential lawsuit.
One upsetting trend has been for agents to encourage investors to flatly claim they have no knowledge of the property since they have never lived there. It is extremely unlikely that the owner of a property has zero knowledge of some aspect of the property they are selling, and agents who practice this lazy approach to listings are going to one day find themselves in very deep trouble....I hope.
This is with reference to Texas as other States handle this differently as already stated. If the disclosure is honestly completed it benefits both the buyer and the seller. Unfortunately Texas laws are written to favor the seller and not the buyer. Texas does not have any and/or stringent enough laws to prevent seller disclosure fraud.
It (the form) is essentially a formal way of complying with our legal requirement to disclose known defects that materially affect the value of the property but are not easily seen by the buyer. We have a state form but some brokers use their own. In my view, it benefits both the seller and buyer...the buyer learns more about the property and the seller (who is honestly forthcoming) protects him/herself from losing a potential lawsuit. One upsetting trend has been for agents to encourage investors to flatly claim they have no knowledge of the property since they have never lived there. It is extremely unlikely that the owner of a property has zero knowledge of some aspect of the property they are selling, and agents who practice this lazy approach to listings are going to one day find themselves in very deep trouble....I hope.
I don't think that is so much the Agent coaching the Investor but the Investor learning of the various disclosure loopholes elsewhere and applying them. Just as in any profession I am sure there are Agents out there that might not have high ethical standards and are doing this. However with the potential high liability dealing with listing a flip or other investment property I would find it incredulous that any Agent would want to assume additional liability and potential legal recourse by coaching an Investor to lie on a disclosure.
I have seen so many different disclosures -- some are very comprehensive (Georgia's, for example, is 5 solid single-spaced pages, plus a 6th signature page, detailing items such as number of HVAC units, age and servicing of each unit, etc., etc.) and some are basically worthless (one in Illinois I saw was basically one page, with 15 questions, "yes/no". Why bother?)
In some cases, the owner OR the investor truly "don't know". How old is the roof? Well, if I bought the house 7 years ago, and was told the roof was "about" 2-3 years old at the time, I could say 10 years. But I might have suspicions that I was lied to, and discover that the roof was actually close to 15 years old. Do I say 10? 15? Or "Don't know"?
To me, a "don't know" would trigger a much closer look during the inspection, or even warrant specialists (i.e., a roofing contractor/inspector) to examine components that I was concerned about.
I don't think the disclosure is meant to "protect" the buyer in any aspect. The disclosure is filled out by the seller to protect them against any lawsuit if a buyer says "You never told me x, y, or z about the house."
Buyers should be getting their own inspection to help protect their investment. A seller isn't there to help a buyer protect their investment. A seller is there to look after their own needs in the transaction, sell.
I went to a a one year mediation that is specified in standard KY sales contract. You have a year to sue the previous owners for breach of contract in a binding mediation setting. The "judge" in the mediation explained to us that the Sellers Disclosure is really used to protect realtors themselves and it is not nearly as 'important" as people think it as as a useful realty contract. Because this was almost 5 years ago, I forget the reasons given, but I do clearly remember him explaining to us~buyers, why the disclosure sheet is only to keep realtors safe from certain legal actions.
In any event, It useless to me. I don't trust sellers to be honest. In all the houses we've bought, except this one, the sellers have been honest, but after that experience, I would no longer consider it a useful document.
Last edited by thunderkat59; 12-14-2014 at 12:09 PM..
Reason: Change "Buyers" to "sellers"
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