HONESTY IS CRITICAL ON SELLERS REAL PROPERTY DISCLOSURE (SRPD) FORM
Posted by New Home Resource on September 14, 2015 in
Remember how you used to cringe for those people you’d see on television – as you watched Mike Wallace walk up to them with a cameraman in tow? It was everyone’s worst nightmare, because it meant some piece of information that they’d rather had stayed long buried was now front page news.
That’s pretty much the way sellers feel when their buyers discover that perhaps they weren’t completely forthcoming in the information provided on the Sellers Real Property Disclosure (SRPD). Because that’s usually about the time the buyer files a lawsuit against the seller, too. (Enter: Mike Wallace-like sinking feeling.)
Anyone Have A Pen?
Anyone who has bought or sold a home before knows that if this is going to become a digital world, it hasn’t happened yet. Piles of papers require signatures from both buyers and sellers – from contracts and disclosures to releases and quitclaims. It’s not uncommon for each party to have hundreds of pages of documents to read, complete, acknowledge, or sign.
But in that crush of documents, there’s one in particular that requires specific information that is often available from only one party: The Seller. And that is the Sellers Real Property Disclosure. It’s perhaps one of the most informative and relied-upon documents out of the bunch – because real estate agents and potential buyers will be reviewing it carefully as part of the offer process.
What Is A Sellers Real Property Disclosure?
Simply put, this is the seller’s chance to lay out anything that can negatively affect the value, usefulness or enjoyment of the property. The latest version of your state’s SRPD form is normally provided by your real estate professional, and typically requires you to answer a set of specific questions – in detail – about the condition of the home and its components. It’s the seller’s obligation to disclose these kinds of issues, and the buyer’s responsibility to be completely aware of past problems. While the types of disclosures required will vary from state to state with regard to the information that must be shared with a buyer, they can also perform another very critical function: SRPD’s can protect the sellers from future legal action.
What Potential Buyers Will Look For
As an example: It’s standard practice in real estate to give a home a fresh coat of paint before putting it on the market. Nine out of 10 times, the intention is to show the property at its best. But every so often, the seller paints the house in hopes of covering something up – such as a water leak. In reality, anything from a leaky window to loose siding, or remodeling to pets living in the home – all these things and more need to be honestly and thoroughly answered in full on the SRPD form.
Fortunately, having the latest version of these forms available to complete will help jog your memory, because the questions asked are quite specific and will cover any mechanical or cosmetic issues that have proven to be a legal problem for other transactions (generally discovered by previous lawsuits).
Unfortunately, in some cases sellers will breeze through the SRPD quickly and without giving it much thought (remember that pile ‘o paperwork we mentioned?) – and perhaps unintentionally forget to note that the air conditioning required repairs 6 months ago, or that some roof tiles were replaced after a storm a few years back. After all – there was a problem, it was fixed, so not it’s not a problem anymore, right?
Wrong. While in theory that concept may work, if a problem should occur again with any such items after a new buyer takes occupancy, there is the potential for liability on the seller’s part because they failed to make full disclosure to the buyer about its history.
What Happens If A Seller Fails To Disclose?
Remember what we said about Mike Wallace? It’s sort of like that. Because once an issue arises and the buyer discovers that they weren’t given full disclosure – the party begins. The problem is that the only ones invited to this party are buyers, sellers, real estate agents, inspectors, attorneys, mediators, and judges. And everyone discovers that no one seems to like each other very much.
Plus – it costs money. A LOT of money. All those professionals getting involved and all the repairs and inspections necessary – they’re not free. At the end of it all, if a judge determines that the seller was at fault for failing to provide information to a buyer about a pre-existing condition, it’s more than likely all going to come out of the seller’s pocket. From court costs and expenses, to repairs and even punitive damages – and it can amount to a very pretty penny.
In some cases, sellers do decide to deliberately omit information from an SRPD (completely against the advice of their real estate professional, by the way) – perhaps thinking that it’s been resolved, it won’t be discovered, or it can potentially be blamed on another source by the time it is found.
For those sellers who might be thinking along these lines, we have just one word for you: Neighbors. The same ones who may have helped or commiserated with you over a costly repair or problem . . . are now going to be living right there with your new buyers on the same street. Let’s just say – it’s a gamble that’s not worth taking.
In short, full disclosure up front is the only way go to. In some ways, it can actually help a seller, in fact. It shows that the seller is thorough and upfront, and that goes a long way toward giving potential buyers peace of mind.
New Home Resource helps current and future homeowners with all of their Las Vegas real estate needs. Whether your preference is for a newly-built home from a local builder, or a resale property in just the right location, a New Home Resource Realtor® is here to find the perfect property for you. Please contact a New Home Resource Realtor® today at 702-365-1000 or at www.newhomeresource.com. Broker Joanna Piette, and agents Denise Moreno Thrasher, Jessica O’Brien, Evelyn ‘Beng’ Kern, Lance Partin and Kathy Paterniti are all here to help!