General - Chapter 8 Lesson 1 Flashcards
Caveat emptor “let the buyer beware”
required buyer to examine property carefully instead of relying on a seller to disclose problems
material facts
refer to the condition of the property and its structural components, would affect a buyer’s actions
Examples of material facts
soning and prop use, environmental hazards, HOA obligations and restrictions, citations against the prop or lawsuits against the owner
Latent Defects
not plainly observable or that would not be discovered in a reasonable inspection
Patent Defects
plainly observable
In full disclosure states, most disclose presence of substances, materials, or products that may be…
environmental hazards
Disclose natural hazards like…
flood zones, wetlands, or historic districts, and homeowners associations
Public controls and utilities
local zoning and planning, boundaries of school districts, utility providers, airport flight paths, and local taxes and special assessments
Real estate licensees are not required to disclose…
stigmatized property, HIV or AIDS, sex offenders
standardized property condition disclosure statement
sellers of residential property disclose facts and defects to prospective buyers
as-is clause
home is sold in its current condition with no guarantees
as-is clauses do not…
remove liability if it is discovered that the agent or seller engaged in active fraud
seller is generally not liable for errors or omission if…
no knowledge, reason to believe the issue had been corrected, or statements based on info obtained from a source of authority
licensee obligated to disclose…
known material facts and defects
red flags
stains on walls or ceilings that could be causes by leaks in the roof, cracks in walls, foundations, and sidewalks, rotted trim wood or peeling paint, or sawdust that could be caused by wood-destroying pests
licensees are not required to…
inspect areas of the property that are not reasonably accessible
opinion
judgment formed about something that may not necessarily be based on fact
puffing
an exaggeration about the quality of a property that may be difficult to back up with proof
Important contingency is…
home inspection
home inspections look at
all systems, foundation, basement, and visible structure, roof, attic, and visible insulation, windows, doors, floors, ceilings, walls, sidewalks, driveways, appliances, and fireplaces
home inspection intended to find items that are
dangerous, damaged, or inoperable (not to find every possible fault, provide survey, determine compliance with building codes, or provide estimate of repair costs)
home warranty
provides some degree of protection from the cost of repair or replacement (major systems, structural elements, and major appliances)
“Hmmmm should I disclose this?”
Disclose it
