If you have read through the “Why You Need a Home Inspection” part on my website you know how bullish I am about home inspections as a result of a mishap I had in my personal home buying experience. I always say that I would rather lose a sale because the house did not pass muster than have a client move into an unsound home and have a bad experience.
However, even with the best home inspector, the one the seller agents call ‘the deal breaker’ the inspector cannot see or find every single chink in the structure’s armor. He may discover evidence of a problem but how large or small that problem may be should then be determined by an expert in the specific area of the problem. It will be up to you, the home buyer, to act upon the evidence in a timely manner and request further exploration in order to gather more information.
Discovering a serious problem later on may leave you no recourse with the seller. The case study that I read started with evidence of ‘rot’ found during a home inspection. The inspector, who also happened to be an engineer, stated in his report that the rot did not pose a structural problem, so the buyer went ahead and bought the home without doing any further investigation or raising the issue with the seller.
If I were there for that diagnosis I would have been thinking that the engineer said it did not pose a structural problem -- at the present time, or from what he could see. Have you ever had rust rot on your automobile? What does it do -- it progresses and spreads. I would have raised a red flag and suggested further investigation or at least the notion that there was possibly more there than meets the eye.
The reason why the seller should have been questioned about their knowledge of the problem is because:
1) We do not use “Seller’s Description of Property” forms so the seller has no opportunity or reason to provide specific information as to their knowledge of the condition of the property.
2) Only if a hidden structural defect that would affect the value or the desirability of the property is disclosed by the seller to the seller’s agent is that seller’s agent morally required to reveal that fact to a buyer. That is a governing rule for REALTORS®.
Continuing on with what ended up being a law suit, the new owners of the house where the rot was discovered started noticing “a damp smell, the presence of potato bugs, and the ceiling tiles separating.” The new owner had “the home re-inspected and this time the inspector found serious mold, rot and pest damage. The extent of the damage hadn’t been easily discovered the first time they had the house inspected, because new siding, trim and insulation had been installed”.
Here is where the story reaches its tipping point. “With the new inspection report in hand, the couple determined with the help of a contractor that it would cost more to repair the property than to rebuild”. Any of us would be fighting mad to get this kind of news. Right? Of course, the logical next step would be to go to Court and that is exactly what these folks did. “They sued charging the sellers with fraudulent concealment and negligent misrepresentation”.
Although the court found in their favor on the first go around, they lost an appeal because even though the court found in their favor based upon “egregious nondisclosure and concealment” by the sellers, the case was dismissed based upon Caveat Emptor. In this case the buyer was made aware of a problem but did not follow up in a timely manner.
I believe the most important part of a home purchase is doing your homework and that includes a thorough home inspection with solid answers for any questionable problems uncovered, speaking with town officials about the current and future neighborhood plans and even going so far as to interview the neighbors who would be more than happy to spill their guts with everything they know about your home owner, the neighbors next door or the overall community. It’s up to you to get out, walk the streets and knock on doors. Caveat Emptor.
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