When The Buyer Backs Out: Real Estate Sales SolutionsWhen The Buyer Backs Out: Real Estate Sales Solutions


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When The Buyer Backs Out: Real Estate Sales Solutions

The first time I sold a house, I had no idea that the buyer could back out of the contract partway through. I was taken aback when it happened to me, and my real estate agent had to explain the process of terminating the contract and requesting the earnest deposit. After the contract was terminated, I spent a lot of time researching why a buyer could back out of a sale, what I could do about it as the seller, and ways to minimize the risk of it happening. I created this site to share what I've learned in the hopes of preventing other homeowners from experiencing what I did. I hope it helps you to be better prepared as you sell your home.

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Selling Your House? Avoid These 3 Full-Disclosure Mistakes

If you're selling your house, you're required by law to disclose information about the condition of your property. If you fail to do so, you may end up having to pay for your omission. If you sell a home that you know has issues with plumbing, termites, foundation issues, lead paint, roof defects, boundary disputes, or more you could be sued by the buyer in a court of law. As you can imagine, lawsuits regarding disclosure failures can get quite expensive. The best way to avoid them is to avoid making disclosure mistakes in the first place. 

Failing to Disclose                                                         

While you don't have to disclose every little thing - like the time that your toddler scratched the hardwood floors up - you do have to disclose major issues with your property. Major issues include all major defects and latent defects. Latent defects are those that are hidden or not obvious. For example, foundation issues may not be visibly noticeable, so these are considered latent. Generally, you do not have to disclose cosmetic defects. However, you might want to make sure that cosmetic issues are actually cosmetic. A water stain on the ceiling may actually be a sign that the roof needs repaired.  

Forgetting Previous Disclosures

Some homeowners forget to pass on previous disclosures given to them at the time they purchased the property. For example, if you bought your home knowing that the porch was added without a permit, you have to disclose that information to the new buyers. They may try to remodel later on only to find out that they have to tear out and/or pay fines for the unapproved work. It's a good idea to pull out your old paperwork to look for disclosures that you may have forgotten about. 

Filing Wrong Paperwork

If you have a real estate agent or attorney, they will help you fill out the proper paperwork. To stay on the right side of the law, you will need to fill out a disclosure form. The form has about 19 questions on it pertaining to the condition of your home. You also have the choice to fill out a disclaimer form instead of a disclosure form. This form basically states that you're selling the home "as is." 

Several mistakes made during the disclosure process can come back to haunt you later on. To avoid making mistakes, make sure you consult a real estate agent or attorney before filling out your paperwork.