Dec
29
Added:
12/29/2011 9:56 AM
Most people have heard of and are familiar the word “Fraud” and its negative connotation. In the State of Michigan we also have the word “Nondisclosure” which is also referred to as “Silent Fraud.”
If you are a seller, you would have been asked by your real estate professional to fill out a “Sellers Disclosure” form. This form is used to give potential buyers additional information regarding your home and property they would not know by looking on the Multiple Listing Service (MLS) or the printout given to them by their buyer’s agent. Items typically on the Sellers Disclosure form are:
- Appliances – what are included and do they work
- Type of water and sewer at the property – well & septic or public water & sewer
- Fireplaces
- Humidifiers
- Central Air Conditioning
- Alarm System
- Pool & Equipment
- TV Antenna, Satellite Dishes, TV Controls
- Hot Tubs
- Basement/Slab/Crawl Space – which & any water/drainage issues
- Insulation – what type & where if known
- Roof – age and if any leaks
- Heating System – age & what type
- Plumbing System – age and any issues
- Electrical System – age and any issues
- History of Infestation – any termites, carpenter ants and any damage
- Environmental Problems – do you have any to your knowledge (asbestos, radon gas, lead paint, any fuel or storage tanks, any contaminated soil, etc.)
- Flood Insurance – do you have flood insurance on the property
- Mineral Rights – do you own the mineral rights to the property and will they be conveyed to the new owner
- Shared Property – do you own anything in common with other landowners (walls, fences, driveways, etc.)
- Common Areas – ex. pools, clubhouses, tennis courts, etc.
- Modifications – did you modify the structure of this property or make any changes/repairs without using a licensed contractor and not applying for a permit
- Litigation – is there any pending legal issues regarding this property
- Outstanding Bills – does the property have any special assessments or bills that have not been paid in regards to this property
- Additional items
As the seller, when you fill out the Sellers Disclosure Form you need to fill it out to the best of your ability. You may not know the answers to all of the questions but do the best you can. You do not want to commit “Nondisclosure” or “Silent Fraud” on this form or at any time throughout the process of selling your home. The following are ways you can commit fraud:
- Your home has a defect and you purposely do not disclose the defect
- You disclose the defect but you understate the severity of it when questioned by the buyer
- You become aware of a defect during the selling process and you do not correct a statement made previously to a buyer or you do not make a change to the Sellers Disclosure Form
Your real estate agent also needs to follow the same guidelines as the seller. Of course, the real estate professional does not know everything about your house but they cannot knowingly commit fraud. If they do they could lose their license.
You may think that if you state that the property is sold in “as is condition” this eliminates the risk of fraud. Unfortunately, you would be wrong. Even if you are selling your property in “as is condition” and you are aware of defects you still must disclose those defects even if you have no intention of correcting those defects.
The point to all of this is to just be honest with prospective buyers. It is better to not get as much money out of your property by telling the truth than to lie and end up in court with all of those expenses (attorney fees, court costs, time, energy, etc.) and potentially go to jail.
If you encountered any real estate fraud or if you are aware of a circumstance of fraud, please respond to this post with the example so we can all learn from other people’s mistakes.
Joy Watts
Watts Realty Team
5071 Gull Road
Kalamazoo, MI 49048
www.wattsrealtors.com
1 comment(s) so far...
Re: Preventing Real Estate Seller Fraud in Michigan
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By Coogee Property on
2/1/2012 2:46 PM
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