Real estate law is a body of law that provides protections to:
- Buyers;
- Sellers;
- Landowners;
- Contractors;
- Real estate agents; and
- Builders.
During real estate transactions, the sales and purchase documents must be well written to avoid any issues or delays later on. In many cases, litigation results when the parties to a real estate transaction have a dispute, such as:
The real estate laws in each state regulate commercial and residential real property transactions, in addition to landlord-tenant relationships. Federal law protections govern discrimination issues under the Fair Housing Act, in addition to environmental violations.
What Are Home Seller Rights?
When an individual plans to sell their home, they must follow certain rules and regulations to avoid future disputes. It is important for an individual to be aware of the sales process and to know their legal obligations as a home seller.
Generally, home sellers can:
- Advertise their property;
- Request a home inspection; and
- Set a reasonable price for the home.
An individual can also hire a real estate agent to complete these tasks. Home sellers are permitted to set certain conditions before purchasing the home.
For example, an individual may request a certain amount as a deposit before closing or verifying the mortgage loan. A home seller has the right to accept an offer to purchase their home, or they can refuse the offer, assuming it is refused for a legitimate reason.
Valid reasons to reject an offer or walk away from a deal with a buyer include:
- The price was not high enough;
- Uncertainty about the borrower’s ability to secure a loan; or
- The seller changed their mind about selling their home.
It is illegal, however, to discriminate on the selling of a home based on:
- Race;
- Religion;
- National origin;
- Gender; or
- Family status.
The Fair Housing Act prohibits these forms of property discrimination. A seller also has the right to legal representation throughout the process.
What Are Some Common Mistakes to Avoid When Selling the Home?
An individual selling their home may be an emotionally draining process. Handling all of the house showings can also be challenging.
To minimize the difficulty of the process, an individual should access the resources that are available around them. Things an individual should consider while selling their home include:
- Think from a business perspective rather than an emotional perspective when beginning the process of selling a home;
- Hiring a real estate agent will assist with the process significantly because they can provide their expertise on the state of the housing market and what home buyers are looking for;
- Do not underestimate the power of more advertising and online options;
- Set the house price at a reasonable because over-priced homes typically do not sell;
- One of the best strategies is to have a lower price to attract more offers;
- Pricing strategies may depend on whether it is a buyers’ market or the sellers’ market for homes;
- Winter months are harder to sell in because people are usually busy with the holidays and are more comfortable being indoors during the cold season;
- Invest in getting good quality photos of the home online because, many times, this is the first time buyers view the property;
- Getting good home insurance for home viewing is beneficial in case there is an accident on the premises;
- Having the home inspected as early as possible and fixing any major problems;
- Cleaning and staging the home by a professional can help to make a solid impression on the buyers;
- Accommodating the buyer’s time to view the home, even if it is inconvenient for a seller, will make sure they do not miss out on any potential offers and;
- Screening the buyers by requesting a pre-approved letter from a mortgage lender can deter unqualified buyers and save the seller time in the selling process.
What Are the Disclosure Requirements for Home Sellers?
Every state has different regulations for property disclosure requirements during a home sale. A seller needs to be aware of them and adhere to them.
If a seller fails to disclose the information required by state law, they risk losing money and facing a lawsuit for damages. For example, a Maryland home seller selling their property must submit a Residential Property Disclosure or a Disclaimer Statement describing all the defects with the property and its condition.
Maryland, however, is unique because it only requires the disclosure of the known defects or a disclaimer regarding the property’s condition, but not both. Generally, transparency in any form will save a seller from potential lawsuits.
Another example is Texas, where a seller must submit a form that discloses any defunct material in the home. This form must be completed to the best of the seller’s knowledge and before the date it is signed.
Texas has more specific requirements regarding what has to be repaired on properties for sale.
What Are Some Common Examples of Defects That Must Be Disclosed When Selling a Home?
A seller needs to be aware that what is considered a defect and what is required to be disclosed varies by state. In general, a seller has to disclose any material and dangerous defects that may impact the property’s fair market value.
The most common examples of what sellers are required to disclose when selling their property include, but may not be limited to:
- Leaking roof or ceiling;
- Foundation cracks;
- Termite damage or infestations, in addition to any other types of pest infestations and damage, for example, rodents or other insects;
- Flood damage or flooding, for example, in the basement;
- Any known toxic conditions, such as:
- asbestos ceilings;
- mold;
- lead paint;
- Whether the home is exposed to any naturally hazardous conditions, such as being located in a flood zone or on an earthquake faultline;
- Deaths on the property that occurred within the previous three years;
- This requirement to disclose may vary depending on the state where the property is located;
- Faulty electrical wiring; and
- Mechanical problems, for example, those associated with air conditioning and heating.
Neither the seller of the home nor the seller’s agent may actively conceal any defect. One example of this would be if there is a large crack in the foundation, which is only visible by inspecting the property’s crawl space.
If the buyer wishes to inspect the crawl space, but the seller’s agent denies access to it while claiming that it is locked and inaccessible while assuring the buyer that the foundation is adequate, they may have actively concealed the defect.
This is especially true if the seller’s agent knows the foundation is compromised. In that case, a buyer would likely have a legal claim against the seller or the seller’s agent for actively concealing the defect in the property involved in the transaction.
When Do I Need to Contact a Real Estate Lawyer?
If you are selling your house and unsure of your rights and obligations, consulting with a real estate lawyer in your state is important. The process of selling a home is time-consuming and overwhelming.
A lawyer can help you handle all the steps associated with your home sale. Your lawyer will ensure that all the paperwork is completed accurately and your home sale goes as smoothly as possible.
