Jim Valentine on Real Estate
Real estate transactions involve a lot of money, not just for the purchase price, but for the many costs associated with the transaction. These go beyond the basic title insurance, escrow and transfer tax costs to appraisal fees, inspection fees, repair/replacement fees, etc. Many of those fees are put in play, or irrevocably committed to, before the escrow is closed and the property transfers. With so much money on the line from early in the transaction, to the close, and even beyond, a lot of trust is required.
We’ve learned over the years that when you say “trust” to an attorney, they laugh. That is what fuels much of their business, when trust is compromised or broken. It is a reality, however, that there will be times when you are relying on the other party to do their part in a truthful and honest manner. What happens when they don’t? You have money on the line and they cross the line of fair play.
It doesn’t happen often, but it is important that you do what you can to prevent being taken advantage of should you have a seller with evil tendencies. We strongly recommend that you have a licensed home inspector give it a complete inspection when buying an improved residential property. If there are areas they can’t see, why are they covered? Are they simply outgrowing the house and have full rooms, or are they covering something? There are occasions when deceitful people play games.
Unfortunately, if there is something you can’t see that is wrong with the property, you are relying on the integrity of the seller to represent to you the true status of the property. We learned recently of a case where the seller had been advised by the state of Nevada of work that needed to be done by a date certain. The property closed escrow the day before the deadline. The buyer was not told and as a result bought a property with a lot of engineering and excavation work that needed to be done. Yes, it should have been disclosed, but it wasn’t.
The same property had an illegal apartment that the buyer was counting on to generate income. It has to come out. The septic is located on the neighbor’s property, and they won’t grant an easement meaning the buyer needs to install a new septic system. As a result of moving the septic, the buyer needs to drill a new well. Oh, and the beautiful pond in the center of the circular driveway was determined to be the source of the water causing the water damage in the basement of the home and must be filled in or lined at significant cost.
None of those and other items were disclosed to the buyer at a cost of over $500,000. What does one do when the other party lies and covers things up? If the offending party doesn’t willingly offer to offset the losses one must litigate or mediate. Most real estate contracts provide for the prevailing party to have attorney fees paid in the event of litigation or mediation, but the process is lengthy, costly and there is a big risk that the money that you seek won’t be there when it’s over. A person who lies in one part of their life will likely hide their pay-judgment money. That’s where a good attorney comes into play. Don’t go cheap on your attorney. Like a good Realtor, they are well worth their proverbial weight in gold to do what they do for you.
Even with all the precautions taken, you can still be a victim of a swindler. Be very careful as you approach a transaction, and all the way through the transaction. If you miss something it can be hard to get made whole by the other party. Honest people will make it right in most cases, but the dishonest ones will be there with their other hand out looking for more. They don’t play fair and are looking to gig whoever they can to get what they don’t deserve, whether it be more money, or saving money by not mitigating a problem.
“Trust, but verify.” Famous words that will help you navigate your real estate business with reasonable safety. Lack of disclosure calls for treble damages per Nevada law, but you have to prove and prevail.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, License No. BS-03481, RE/MAX Gold Carson Valley 775-781-3704. dpwtigers@hotmail.com.