Buying and Selling: What They Don’t Talk about on HGTV
So you’re looking to buy a home, or maybe you are looking to sell your home and upgrade for something bigger and better. Why not? The market is back, see what’s out there. Open concept kitchen? Of course. You like the look of classic hardwood, but you hear that engineered laminate might be easy to repair with kids running around. Granite countertops? At a minimum, but haven’t you heard that quartz is all the rage now?
Buying a new home or selling an existing home with an eye to the future can be an exciting and yet stressful time. Something you should not overlook as you cast an eye toward the future however is the Seller’s Disclosure Statement you are required to fill out as a seller and are mandated to receive as a buyer, under Michigan’s Seller’s Disclosure Act (the SDA for short). The SDA requires seller’s to fill out the Disclosure Statement, which should be provided by your realtor if working with one, regarding known defects or issues with certain parts of your home, for example leaks in the roof or basement or plumbing and electrical issues. While the SDA only requires a seller to disclose known issues with the home, if you are a seller you should not take this important step in selling your home too lightly. Don’t be in a rush to sell your home and forget to disclose you had standing water in your basement every other Fall for a week or that roof leak that didn’t require a replacement, but you just slapped some tar over. Often sellers feel that if they perform a “do-it-yourself repair” or even a professional one, they don’t need to disclose the issues asked about in the Disclosure Statement. This can lead to significant liability down the road if the next owner finds an issue in the home and comes calling on you to fix it. When filling out the Disclosure Statement, it is better to err on the side of caution and disclose any issues you are actually aware of that the statement asks about.
Conversely, if you are a buyer, take the time to read the Disclosure Statement carefully (it’s probably one of the biggest purchases in your life and the document is only a few pages after all). Many times there is no issue disclosed, but if an issue is pointed out, or an “unknown” answer is given in response, be sure to ask the seller and their realtor for more information. If you don’t like the answer you get it may be a sign this isn’t the home for you.
Once you move in, be sure to keep an eye on what is going on in your new home carefully for the first few weeks. The SDA gives a buyer a limited time opportunity to rescind a property sale if it turns out that disclosures on the Disclosure Statement were made inaccurately. Even still, some issues may not manifest themselves for months, for example, leaks if you buy during the dog days of summer. In a case where the problem doesn’t crop up until months after you buy the home, you may still have a case to bring against the seller (or in limited circumstances their agent also) for damages you incur in having to repair the property or for its diminished value.
The SDA provides home buyers and sellers with opportunities and pitfalls. So much of what makes a home tick goes beyond whether it meets the eye test and simply takes time to learn. Michigan requires accurate disclosures from sellers for just that reason. If you pay close attention to the Disclosure Statement, either reading or filling it out, you may avoid extra cost down the road. If you are a seller or a buyer who has had an issue with a home come up, you should be aware that the SDA provides rights and responsibilities to both parties in addressing a home that doesn’t end up living up to its top shelf billing.