Ok, here is a real life example that I experienced this last summer while representing a buyer client.
First time buyer client puts a home under contract in the "starter" home category (meaning inspection costs, OM and EM costs, and closing costs are a lot more impactful to buyers in this price point than to those in the luxury segments). This home was in the $300k to $400k price range in Houston. Sellers disclosure is completely clean and left the age of the roof blank. My assumption is that unless what is stated on an SD is bad/wrong, don't believe it. We knew the HVAC system was older going in to it, but the client was willing to take that on as long as it was working properly now.
In between our initial showing and the inspection, the HVAC system goes out and we find out that it's R-22 and probably needs to be replaced as it's ~25 years old. Further, the inspector gauges that the roof is 20-25 years old, which means that it's not insurable and will need to be replaced if my client wants to get insurance for their mortgage. And finally, we find out that although the entire home has recently updated outlets, rockers, and fixtures, nothing is grounded (this is a fire hazard, and no electrician would have done this, meaning it was a DIY special). We went to the seller with an amendment that said we wanted the owner to provide a new roof, new HVAC system, and an electrical system that was properly grounded. He responded by asking for a number instead, so we asked for like $40,000, and he went ballistic, telling us how unreasonable we were being and so on. Oh, and during this time the seller magically found and produced his receipt for the last roof replacement that was like 25 years ago. The sellers agent made it clear that the seller was not going to give anything as "he had already come down during the negotiations" (this one always gets me), so we terminated. I provided the reports we had so that the seller could not hide from these to future prospective buyers like he did with us.
Fast forward about 6 weeks, the house is still for sale, and I get a call from another buyers agent. She asked me why we backed out, so I told her exactly why. I asked if the seller had provided the inspection reports and she said that she was told by the sellers agent that we backed out because we "got cold feet" and that they didn't have any reports. The sellers disclosure had not been updated in the 6 weeks since we terminated. None of that was a mistake, all of it is just plain fraud, and future buyers (likely first time homeowners) shouldn't have to pay thousands of dollars getting into a tar baby because a seller and their agent are liars. I'm going to try and treat people how I would want to be treated, and that includes future buyers.
Moral of the story:
- People will lie when money is on the line.
- If you are looking at a home that has previously been under contract, CALL THE BUYERS AGENT AND ASK WHY THEY TERMINATED.
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