failure to disclose fire

[Anonymous]

OK....all financials have been ironed out. So today our LO told us to get quotes on homeowners ins. I called our ins agent and gave her the address and other info. She informed us that there was a substantial fire in the house 2 years ago. The sellers didnt disclose this.  It is an 'estate' sale but the sellers (grown children) are local...so they knew this.  I have already informed their attorney that the sellers must pay for a thorough home inspection and warranty. Even if the inspection comes back ok, should we also ask for a modest price reduction?? The house does have newer hardwood floors, carpet, paint, appliances. We were willing to pay a little extra because it was updated. But this extra put us $50 over budget. Now I want that 'extra' back. Am I unreasonable??

[Anonymous]

They may not be required to disclose a situation that has been rectified.  So, if they repaired all the damage correctly and can show proof, they probably do not have to disclose it.  Also, I am not sure as an estate sale, what they are required to do at all.  If they never lived in the house (or at least recently) they may not be liable to know specific info on the house.  Especially if the sale is listed as "as is" type sale.  Now, if anything comes up in the home inspection that shows it was repaired faulty, that is another issue.

[Watchmann]

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mickie08 wrote: 
Also, I am not sure as an estate sale, what they are required to do at all.  If they never lived in the house (or at least recently) they may not be liable to know specific info on the house.  Especially if the sale is listed as "as is" type sale.  Now, if anything comes up in the home inspection that shows it was repaired faulty, that is another issue.

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This is correct.  My wife was the executor for her dad when he passed away in Sept 2008.  His condo had to go up for sale during the settlement of the estate and the eventual buyer wanted a statement from her that there were no faults with the unit.  The inspection had come back clean and my wife couldn't attest to any unknown faults as she had no knowledge of the unit as she had never lived there (just visited a few times).  The buyer dropped that request and the deal went through.  

[kai_1103]

Yikes... Realtors are required to reveal all material facts.  So if its a Realtor, and if they know, they should have disclosed- repaired or not.  It is also true that the people selling dont need to "attest" to knowing.  But the Realtor follows a code of ethics that a homeowner isn't bound to, and realistically the Realtor may know. 

That being said- if the house is fine and you want it- I wouldn't sweat it.  Be warned- houses that have had signifigant fires ever- even a very long time ago- are known to smell of fire on occation.  You'll be sitting there watching TV and think... what on earth is that.   

I would recommend two inspectors.  Since this is a big deal- I wouldn't risk an inspector missing something.  They aren't all great- and they are all human.  I would strongly recommend "better safe then sorry".  Don't be wowed by beautiful floors- make sure it is a sound structure and you will sleep well in your new home for many years!  Surely you have seen HGTV when the people realize their inspector overlooked HUGE problems.  I would hate that to be you.

If it is repaired well and properly with no remaining damage evidence, then the value won't be affected.  If they skimped, even on non-structural issues- the value is affected.  But hey- you love the house so do what seems right.

Best of luck.  You are in my thoughts!!

[Anonymous]

realtor is not required to disclose anything. They are just handling the paperwork.  The sellers are the ones responsible for disclosing.  A realtor is only liable for knowingly passing along false info.  as an estate sale, none of the parties are liable for past incidents on the property aslong as those incidents have not been purposefully covered up and have a negative affect on the home.  If any dmamge was prepared properly (and it sounds like the house was upgraded at that point), there is no disclosure issue from a legal standpoint.  That said, morally, if the sellers are/were aware they probably should have revealed it.

[Anonymous]

Thanks for all the responses!

1. No Realtor..A FSBO

2. Not originally revealed as an "estate". That was discovered later.

3. The seller we negotiated with spoke HIGHLY of all the upkeep, maintenance, etc... Thats why we paid a little more than planned.  Now the "6 sellers" want to take a "AS-IS" stand. I dont mind that, because we do love the house, but we would have held our ground on our preferred price. Plus I feel we should have a thorough inspection and get a warranty. I think the sellers should pay for it. If the sellers want to promote the high upkeep  and maintenance, then produce paperwork re fire and how it was repaired. Also be willing to pay for warranty. If they want to be hands off, as-is, then we will assume the risk. We will pay for thorough inspection and comprehensive warranty but then we want a modest price reduction.

Is this reasonable??

[kai_1103]

REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law. (Amended 1/00)  (From the Realtor Code of Ethics)

In other words, if they know of it and its material, they can't hide it.  If a Realtor conceals pertinent facts- they are in violation the code of ethics they agreed to.  Like the code says- its not like they have to go hire an inspector or something, but if the seller tells them, "we had a terrible fire but I'm not telling anyone", the Realtor cannot conceal this.  But that is Realtors- not all brokers are Realtors.  A Realtor is bound to a higher degree of integrity, hopefully they follow it.  :-)

Not to argue or anything thougth!  :-)

I would be nervous about what else the listing agent is hiding if I were buying, and would like to be aware of this if I was in the buyers shoes.   Just trying to point out what I would like someone to point out to me.   

Especially, as you say, "morally", sure makes you worry what else is lurking.  If I was the buyer- I would be more than willing to spend the extra money for two good inspectors.  I'd want to sleep well at night.

[kai_1103]

You poor thing.  What a mess! :-)

They know about all the upkeep but not the fire?  Interesting!

You could wait for the inspection, then essentially put them in an embaressing spot if there is any evidence, and if there isn't any- you could bring it up from hearing it from the insurance company, and make your demand.  You sound reasonable to me.  Worth negotiating over, for sure.  Can't get what you don't ask for!  :-)  Good luck!!!

[Anonymous]

I totally agree that I would be concerned and double check the inspection.  My point was the realtor is not repsonsible to discover this stuff, only to not allow it to be hidden.  If the sellers fail to disclose it, and it is a material issue, then the realtor, if they are aware of it, is liable.  That said, if the itmes have been fully repaired and all repairs have been aprroved by the insurance company and owner as complete, it is a non issue.  The realtor is repsonsible to report issues, not past incidents that by all professional accounts have been properly fixed.  Again, it comes down to a moral issue and with this being an estate sale, the sale is as is and requires no disclosures.  The realtor may very well be unaware of the issue.

It will be interesting to see what the sellers and the sellers realtor say when it is brought up. 

Also, there is no reason to wait and "drop it" on them.  Have your realtor bring it up.  Tell them that you are going to require a more thorough inspection than normal and see if they will help offset the cost of that.  Make them aware that you would expect any deficiencies to either be addresses or compensated for.  Holding off until the last minute for bargaining points is as likley to get them to drop the deal as it is to help.  Bringing it up in a reaosnable manner will likely give a more respectable response.

Also, ask them if they have copies of all the repair bills or insurance claim information.  That wold make the inspectors job alot easier as they could narrow down the areas they need to concentrate on.