A buyer is looking at your home and asks a question. Be careful what you say, as it can cost you much more than you realize.
As a seller, you may find yourself at home when a buyer is looking at your home. In most cases, it's smart to leave during the showing. If you are at home and the buyer or his/her agent asks a question, tread carefully. Here are five things to never tell a buyer.
1. Where is the property line?
It's easy to point to the fence and say that's where the property line is. The correct answer to this question is, "I don't know where the exact property line is. If you want the exact location, you will need a survey."
I remember selling a property where my client's brick fence was encroaching on a 2-inch-by-2-inch part of the property next door. My buyers didn't learn of the issue until they decided to add a room to the house. They hired a surveyor who discovered the problem. It cost almost $2,000 and a considerable amount of hassle to obtain an easement (i.e., permission to use) this tiny piece of land. Part of the expense was due to having to re-record the deeds for both parties as well as obtaining a written approval from each of the lenders.
In a different case, the sellers represented that the property line was located at the fence. The fence was actually encroaching on the neighbor's property by 1 foot. The property line on that side was 220 feet long. Due to the prime location of the property, the value of the land as awarded by the court was more than $200,000.
2. Do any ______ live in this neighborhood?
If a buyer asks you a question that references race, ethnicity or religion, it is a violation of the fair-housing laws to answer the question. A better response would be to say either "I don't know" or "federal law prohibits me from discussing race, ethnicity or the religion of my neighbors. If you would like to know more about the general characteristics of this area, you can check the U.S. Census data."
3. Is this a safe neighborhood?
While you might be tempted to say, "We have never had any problems," that's not a good idea. You may not have had any problems, but what about the neighbor on the next block who had her car stolen or who was burglarized? You may not be aware of the problems, but your representation of the safety of the neighborhood could come back to haunt you.
A better response is to say, "If you are concerned, please check the crime statistics for this area either online or at the local police department." Some resources include NeighborhoodScout or SpotCrime.
One particularly important point to note is the issue of sexual predators. CrimeReports.com allows you to enter your address to locate crime statistics plus identify whether registered sexual predators are living nearby. Please note that unless your local policing authority is reporting crimes to these online sources, there may not be accurate or complete data.
4. Is there anything wrong with the roof (or any other major system in this house)?
Your roof may have been watertight all last winter, but it may have developed a leak over the summer. There is no way to know the exact condition of the roof, even if you climb up and look at it. In fact, when roofers climb on your roof to make repairs, it can be extremely difficult to pinpoint where a leak originates. About the only way to tell for sure is to be on the roof when it is raining. Even then, the roof may leak when the wind is out of the south and not leak when it is blowing from other directions.
Most states will require you to disclose in writing the conditions about which you are aware. To protect yourself, it's smart to have your own inspector go through the property and to note where he or she found problems. You can give prospective buyers a copy of the report. There's one important caveat: Be sure to note on the report that the buyers should obtain their own inspections to verify the condition of the property at the time of sale.
5. Why are these floors so uneven?
Buyers often ask about the condition of the property. It could be a stain on the ceiling or a crack in the wall. It's important that you avoid diagnosing what the problem is. Settling could cause the uneven floors, but there could also be a foundation problem. The stain on the ceiling could be a roof leak, but it could also be honey from a beehive in the attic. Again, advise the buyers to obtain their own inspections to determine the exact condition of the property.
To minimize your exposure, avoid being at home during showings. If you must be at home, avoid volunteering verbal information to the buyer. Instead, obtain your own inspection report prior to listing the property and make that available to any buyers who view your home.
Second, fill out any required disclosure statements as completely as possible. Third, encourage the buyers to seek their own inspections regarding any concerns that they may have. Finally, place a home warranty policy on your home that covers the major systems on your property during the listing period as well as for the first year the new buyer owns the home.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
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