Facing neighbor complaints on eve of sale

When the for-sale sign goes up, it's not uncommon for a neighbor to come forth with a complaint -- perhaps about an issue that has never been mentioned to the seller before.

The complaint is often addressed to the seller's agent, either in the form of a letter or phone call. In one instance, a seller's next-door neighbor contacted the listing agent to find out if she knew there was a lawsuit pending against the listing.

The listing agent knew nothing about this. But she was sure, given California's mandatory seller disclosure requirements, that if there was a lawsuit involving the property, it needed to be disclosed to buyers -- there were already several buyers who wanted to make offers.

The dispute centered on a possible encroachment involving a sliver of land. The seller's and neighbor's attorneys worked out a resolution regarding the encroachment. The seller's attorney prepared a detailed disclosure package explaining the issues involved for prospective buyers to review before they made offers.

The offer date was postponed to give time for the issues to be cleared up and for interested buyers to have the opportunity to review the attorney's disclosures. A couple of buyers dropped out of the competition. However, the seller received multiple offers and the listing sold in excess of the asking price.

HOUSE HUNTING TIP: If an issue with a neighbor arises during the course of a home sale or transaction, it's best to deal with it promptly. In the example above, the seller lost a little time getting his home under contract, but wasn't damaged in terms of the sale price. It could have been a different story if the dispute hadn't been revealed to the buyers until after an offer was accepted. It could have killed the deal.

More recently, a neighbor walked into a Sunday open house of a listing in the hills above Oakland, Calif., and presented the agent hosting the open house with a letter. The letter was addressed to the listing agent and referenced a possible drainage problem that might involve the listed property. ...CONTINUED

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