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Old 03-18-2014, 08:25 AM
 
76 posts, read 106,362 times
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We're trying to buy a house in Middlesex County.

Some websites claim that in MA sellers are not obliged to disclose anything except lead paint. Excepting, of course, if you ask them they can't lie. Which makes MA a "caveat emptor" state.

Is that true?
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Old 03-18-2014, 09:03 AM
 
Location: Needham, MA
8,525 posts, read 13,910,379 times
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Sellers must disclose any known material defects. However, in MA sellers are not required to make a written disclosure as they are in some other states. A material defect for example is something like a hole in the roof or that the basement gets water. Something that would not qualify as a material defect is if the house is believed to be haunted.

MA is definitely a "buyer beware" a/k/a "caveat emptor" state. Make sure to do your due diligence. Homes also get "reputations" around town so I recommend working with an agent who knows the town as well. They'll be plugged in to information that you can't find on the internet or at town hall.
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Old 03-18-2014, 09:34 AM
 
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Mike,

Thanks for the info.

So if we were to buy a house and the basement flooded, and the sellers didn't tell us, we'd have legal recourse? I'm asking that with the caveat that of course I want to do due diligence; things are made hard because we already lost one house at least in part because the other bidders waived all inspections. (We'd at least get a pre-offer inspection; but e.g. we're looking at a house tomorrow, and the bids are due Monday. Not a lot of time.)

Agent: we're looking in Winchester, and our agent is based in Newton. We like her, and she's older so she knows the area well overall. E.g. she lived in Reading long ago. Are we at a serious disadvantage if we use her? We were more worried about the issue of if our bid were comparable to another bid the seller's agent might prefer the other bid if the buyer agent in that case was known to him.

Best,

S
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Old 03-18-2014, 10:20 AM
 
Location: Ohio
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My RE lawyer told me that once you do an inspection, you had an opportunity to find out what defects there are and if you proceed with the purchase, you buy the house as is... no matter what is written on the Disclosure.

I guess it'd be different if you asked 'has your basement been flooded' before buying and the answer was 'no'. Then some time later, you find out it indeed flooded before and the seller lied out right, causing you to spend $XXXXX to fix the problem.

If a property has multiple bids, I think how strong your offer is compared to your competitors would be the primary thing that affects your chances. As long as your agent isn't an idiot, you are not at an disadvantage. If you're worried that the agent's friend might get his client the deal if you both are equal in the offer, then up your offer 1k or more for insurance.
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Old 03-18-2014, 10:45 AM
 
Location: 42°22'55.2"N 71°24'46.8"W
4,848 posts, read 11,753,596 times
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Quote:
Originally Posted by mmyk72 View Post
My RE lawyer told me that once you do an inspection, you had an opportunity to find out what defects there are and if you proceed with the purchase, you buy the house as is... no matter what is written on the Disclosure.
When the P&S was drafted for both my houses (bought & sold), there was a clause in there that states the offer letter and the seller's disclosure are null and void once the house closes.
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Old 03-18-2014, 10:49 AM
 
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Quote:
Originally Posted by mmyk72 View Post
As long as your agent isn't an idiot, you are not at an disadvantage. If you're worried that the agent's friend might get his client the deal if you both are equal in the offer, then up your offer 1k or more for insurance.
Thanks for your reply. Yes, I was thinking along these lines.

Best wishes
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Old 03-18-2014, 10:57 AM
 
Location: Needham, MA
8,525 posts, read 13,910,379 times
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Quote:
Originally Posted by relocate37 View Post
So if we were to buy a house and the basement flooded, and the sellers didn't tell us, we'd have legal recourse? I'm asking that with the caveat that of course I want to do due diligence; things are made hard because we already lost one house at least in part because the other bidders waived all inspections. (We'd at least get a pre-offer inspection; but e.g. we're looking at a house tomorrow, and the bids are due Monday. Not a lot of time.)
You'll only be successful in a law suite if you can prove that the former owner knew about the problem. This is not always easy to do.

Waiving an inspection contingency is a hard thing to bring yourself to do unless you've got tons of money in the bank or the house is brand new. If a house is super competitive, I usually advise my clients to put a monetary floor on the inspection contingency. For example, the contingency would not allow you to void the contract without recourse unless the aggregate repair value from the inspection exceeded $10K.

Quote:
Originally Posted by relocate37 View Post
Agent: we're looking in Winchester, and our agent is based in Newton. We like her, and she's older so she knows the area well overall. E.g. she lived in Reading long ago. Are we at a serious disadvantage if we use her? We were more worried about the issue of if our bid were comparable to another bid the seller's agent might prefer the other bid if the buyer agent in that case was known to him.
I wouldn't say you're at a serious disadvantage. However in this market, some properties are selling as pocket listings before they ever get to MLS. Your agent based in Newton is unlikely to have pocket listings in Winchester so it may take you a little longer for you to find a home when working with this agent. However, what's more important in my opinion is that you work with an agent who will do an outstanding job for you. If you feel you've found one, then stick with them. It doesn't matter if you find a house quickly if your agent is going to get things done right.

Would you mind messaging me with the name of your agent? I'm next door to Newton and I'm wondering if I've had prior dealings with them.

Quote:
Originally Posted by mmyk72 View Post
My RE lawyer told me that once you do an inspection, you had an opportunity to find out what defects there are and if you proceed with the purchase, you buy the house as is... no matter what is written on the Disclosure.
I guess you could say there is the law and then there is reality. The law requires disclosure of known material defects. Proving that someone knew and failed to disclose is often quite difficult. So, essentially your lawyer is saying don't depend on the law to protect you. Do your own due diligence before putting pen to paper.

Several recent examples of case law have shown that documents/contracts signed during the closing or during the buying process do not exempt the agent or the seller from accurately representing the property they are selling.
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Old 03-18-2014, 11:39 AM
 
76 posts, read 106,362 times
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Quote:
Originally Posted by MikePRU View Post
Waiving an inspection contingency is a hard thing to bring yourself to do unless you've got tons of money in the bank or the house is brand new. If a house is super competitive, I usually advise my clients to put a monetary floor on the inspection contingency. For example, the contingency would not allow you to void the contract without recourse unless the aggregate repair value from the inspection exceeded $10K.
Actually, I'm wondering about that and asked about that in other forums.

Conceptually, this is exactly the thing I'm looking for. A kind of insurance for me as a buyer, so that the seller won't worry that we'll come back and try to use little things here and there to get them to come down (e.g.) $5,000 after they accept our bid, but also I don't have to worry that the house has been compromised in a serious way. (To me, serious means big termite infestation, big structural defects, etc.)

The last house we bid on, we actually figured we'd have to do up to $100,000 worth of work. ($40,000 would be for a kitchen remodel, which of course doesn't come under "inspection problems" since there was nothing wrong with the kitchen per se.) And our bid was priced accordingly---we wouldn't have come back at the sellers unless there was a fixable, nasty hidden defect. But while there was a line on the standardized purchase form for the floor thing you refer to, we only put in a small amount ($1000). I was worried about putting in more; what if the place is crawling with termites, and the sellers insist that, oh, it's fixable for $7,000?

(BTW, we bid $50,000 over list on that last house, and still got blown away.)

Quote:
Originally Posted by MikePRU View Post
I wouldn't say you're at a serious disadvantage. However in this market, some properties are selling as pocket listings before they ever get to MLS. Your agent based in Newton is unlikely to have pocket listings in Winchester so it may take you a little longer for you to find a home when working with this agent.
How common are pocket listings? Why would a seller want to do it that way?

Quote:
Originally Posted by MikePRU View Post
However, what's more important in my opinion is that you work with an agent who will do an outstanding job for you. If you feel you've found one, then stick with them. It doesn't matter if you find a house quickly if your agent is going to get things done right.
So far she seems good to me, and is timely, etc.

Quote:
Originally Posted by MikePRU View Post
Would you mind messaging me with the name of your agent? I'm next door to Newton and I'm wondering if I've had prior dealings with them.
Yeah, that'd be great. I'll do that sometime this afternoon. Really appreciate the feedback you provide.

Quote:
Originally Posted by MikePRU View Post
Proving that someone knew and failed to disclose is often quite difficult. So, essentially your lawyer is saying don't depend on the law to protect you. Do your own due diligence before putting pen to paper.
Yeah, I figured that's the way it is.
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Old 03-18-2014, 12:13 PM
 
Location: Winchester
229 posts, read 382,692 times
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Quote:
Originally Posted by relocate37 View Post
(BTW, we bid $50,000 over list on that last house, and still got blown away.)
I live in Winchester. Mind sharing which house is this?
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Old 03-18-2014, 12:26 PM
 
Location: Needham, MA
8,525 posts, read 13,910,379 times
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Quote:
Originally Posted by relocate37 View Post
How common are pocket listings? Why would a seller want to do it that way?
It's pretty common for agents to have pocket listings. Sometimes the intent is to eventually put the listing on MLS. I've signed up plenty of listings where the seller needs a few weeks to get their house in shape. In the mean time, I'm telling all my buyers about it because I already have a listing contract in hand. I just put a listing in MLS the other day that's been a pocket listing for about a year. It was new construction and being built. I didn't sell it when it was in my pocket because I wasn't even allowed to put a sign out front and it was in Wayland which is a town I rarely have buyers for. I've also seen listings (although never had one myself) where the seller will not let you put the house in MLS. You have to basically market it by word of mouth.

Personally if you're paying an agent to market your property, I feel you should make use of all the services they offer. One of the most important is putting your house on MLS and generally getting it exposure to potential buyers on the internet, in print, etc. The more buyers you can get interested in your house, the more money you'll get for it. That listing in Wayland I mentioned was put in to MLS last Thursday. I showed it all weekend and on Monday we chose from multiple offers who to sell it to. The only advantage to selling as a pocket listing is that you won't have the public marching through your house and you won't have photos of all your belongings on the internet for the world to see. To some degree, it's a less stressful way of selling but you'll definitely get less money for your house. It's the same thing for FSBO's. They don't get enough exposure to sell for the highest price possible.
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