Disclose, Disclose, Disclose in Honolulu Real Estate
April 9th, 2009 categories: For Sellers
Buyer beware? Not really, a recent Realtor Journal article walked through some very good guidelines Sellers and Broker/Agents should follow regarding disclosures concerning the background and condition of a home or condominium. Below is a modified version of the 8 rules advocated by the Realtor Journal.
1. Make all existing reports known to the buyer. If there’s an inspection report, no matter how old, disclose it. Not providing an old report can be damaging to the seller if a problem crops up later on.
2. Disclose anything that can materially affect value or desirability. Deciding what affects the value is not judged subjectively, and it doesn’t matter if the particular item bothers the seller. A good example is church bells. Some people love them; some hate them.
3. Hawaii law requires a seller to fill out the disclosure form. The Seller’s Real Property Disclosure Statement consists of more than 90 detailed questions that must be completed by the seller. An agent that fills this out for a seller is taking a huge risk and may be putting a seller in a very bad position. CLICK HERE FOR A COPY OF THE SELLER’S REAL PROPERTY DISCLOSURE STATEMENT
4. Don’t make representations about permits. Real estate professionals, depending on what’s typical in their state, will sometimes pull the permit file from a city and county agency and include it in the disclosure packet. However, many permit files are incomplete or have errors. If a permit package is provided, be sure to provide a disclaimer that you have not reviewed it, if not, you’re opening yourself up to a legal allegation that you represented the complete and correct permit history.
5. Make it clear that any estimates you provide are just that. If you don’t have the exact square-footage figures to enter into the MLS, be sure to make clear that the numbers are just estimates. If the exact square footage is important to a buyer, suggest that the buyer have the home measured.
6. Don’t be someone you aren’t. A Seller and their agent are not a building inspector, an appraiser, a lawyer, or a contractor. If a buyer or a seller asks you a question that another professional should answer, refer the buyer or seller in writing to the appropriate professional.
7. Properly attribute information. Disclosed information often comes from private companies or government sources. Whether it’s the size of the lot, the property’s zoning, or use restrictions in a development, be sure that you properly attribute any such information to its source.
8. When in doubt, disclose. If you are a seller and you wonder, “Should I disclose?”, your answer should always be “Yes”. If it’s important enough to ask this question, it’s important enough to disclose. If you say “no,” and there’s a problem later, you’ll be held responsible.
In general, it is best to be as complete as humanly possible with all disclosures. No matter what an issue may be or what may have happened, by disclosing it to a potential buyer the buyer can then make an informed purchasing decision. In Hawaii, a buyer has 2 years from discovery of a problem to seek resolution from a seller. Given this ongoing exposure to undisclosed items, complete disclosure is even more important.
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If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.
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Very well written. This is the kind of information that is useful to those want to increase their SERP’s. Keep up the good work.