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To Disclose or Not to Disclose...

leoniesnook

4 min read

May 27

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Looking for a house is exciting, unless you’re hitting the door step of your 53rd open home when the shine might have worn off a bit.  You can also feel a bit nervous…buying a home is a huge purchase that most don’t do often! The need for information is high.



Two Questions On Arrival

 

When the open home door swings open, there’s two questions I’m always asked without exception, and that I can set my watch by, answered with the smiling enthusiasm of someone who’s never been asked before: 

 

  • First question – ‘Why are they selling?  Buyer language translation ‘If they don’t want it, why would I want it?  Or ‘Is there something wrong with it? and 

  • Second quick-fire question ‘What are they looking for’?  Translation ‘What’s the price I have to pay’?

 

Enter The Media

 

Sometimes there’s something topical or sensational about property in the media which generates a new question entrant.  The ‘meth’ question used to come up like clockwork until it didn’t anymore.

 

On a lighter note, I remember selling for a retired and very proper elderly lady.  She’d owned the place over 30 years having retired from a senior Health Ministry role.  The buyer  asked the obligatory in vogue question ‘has a meth test been done’?  I replied no explaining they could have one if desired and explained the vendor’s situation adding ‘or we can ask her if she’s been hitting the pipe on Tuesday’s if you like’?  We all laughed.  Plot spoiler…we would have asked or requested a test if the buyer required it or if we had good reason to suspect an issue. 

 

Disclosure Question

 

There’s a 3rd question at open homes in more recent times that’s a candidate to complete the ‘always asked questions’ trifecta:

 

  • Third bonus question ‘Are there any disclosures’?  Buyer language translation ‘Are there any problems or issues’? Or ‘What’s wrong with it’?

 

 

Providing Information – The Opportunity & Obligation

 

Sellers – providing extra information is a great opportunity.  Understanding and proactively meeting potential buyers needs for information can help you get more offers and better offers:

 

  • Paint a Picture - Let the agent know what you’ve enjoyed about your property or how you’ve used it (we’ve had clients talk about the time they had a marquee in the garden, or dinner parties at the house etc). It can help others see how they might enjoy the property. 

  • Share Additional Info - If you’ve done improvements over the years, compile a list of them with approx. dates.

  • Independent Reports - Arranging a LIM report from council and a Building Inspection Report allows you to see if there’s anything that needs to be dealt with to help your selling process.  Options can be fixing things first before you go on market or warranting to have something sorted out by settlement to take the issue off the table, or simply disclosing an issue so it’s known and can be factored in to get more reliable offers.

  • Prior Insurance Claims - If you’ve had any previous insurance claims, even years ago, note down what, when and what remedial work (if any) was done, and whether there’s been any ongoing issues or the problem was sorted.  Prior claims are kept on a register and will come up with questions for specifics asked when finance is being arranged. 

  • Recent Sales - This is more for your agent as it never ceases to amaze me that so many don’t give buyers a lists of recent sales.  Providing the relevant sales allows buyers to do their research to be competitive.  Buyers – ask for these from the agent. 

  • Agent Service - When picking an agent think about how well they’ll do all this for you?  Plot spoiler – the service they give visitors to your property can influence whether you see offers and how good those offers will be!

 

Being transparent and helpful fosters trust and confidence and creates goodwill, helpful if any flexibility or consideration is needed later on.  There’s also legal obligations!

 

Sellers – are legally required to let buyers know about any known defects or issues with the property that may be relevant to the buyer.  Failure to do this could see your sale cancelled and/or legal action and significant damages:

 

This is about ‘known’ things:

  • To be clear sellers are not builders, building experts or city planners, and nor are they expected to be, or to find out ‘hidden’ things they don’t know.

  • But they are expected and legally required to disclose anything they know about the property that may be relevant to a buyer.  If unsure, ask yourself this ‘if I was a buyer of a property would I want to know this’?  If in doubt, disclose!

  • Omitting to share known information is effectively the same thing as providing false or misleading information and will land you in hot water.

 

 

You’ve probably heard the saying ‘It’s not the message that counts but how you communicate it’:

  • Hiring an agent who’s highly professional, can anticipate and manage risks, and can write well is critical if you have disclosures, issues or complexities that need to be managed for a smooth and low risk sale process. 

  • An issue may need some supplementary information or advice, or perhaps extra information, which while not legally required in itself may be helpful to give context and a fuller understanding or comfort for buyers looking at your property.

  • Lack of attention to this or handling it poorly could see you exposed to significant legal or financial risks as a seller, or it may give your buyers an unnecessary case of the ‘heebie jeebies’ that sinks your sale purely because it’s not been handled well.

 

Buyers – Asking questions and getting information will help you know and assess your risks, make better offers, and enable you to prioritise and factor in maintenance:

  • Remember though, properties are rarely perfect so it’s just about getting to the bottom of what you are looking at. 

  • Regardless of what information is available or provided to you it’s important you don’t rely on this only and that you make your own assessments, seek independent advice and do your own due diligence checks as well.

 

We hope this helps take some of the mystery out of things and gives you a few clues on what to consider if you’re thinking of selling or buying. 

 

For advice or a chat on your situation and property plans drop us an email or call (leonie.snook@harcourts.co.nz, 0275180008).

leoniesnook

4 min read

May 27

18

2

0

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