“Buyer Beware” are still be the best words of wisdom for everyone in any kind of purchase transaction. When it comes to buying a house in Colorado, the state’s disclosure laws make it easier for home buyers to feel more secure when it comes time to close the deal.
When a seller and buyer enter into a contract, a buyer intends to purchase the property “as is” and “with all known faults”. The seller has certain obligations to let the buyer know of any known defects with the property, as well as other issues. Real estate professionals encourage their seller clients to err on the side of caution and disclose anything that might be considered an issue. The disclosure comes in a legal document called a Sellers Property Disclosure. Let’s take a look at the types of information a home seller is expected to disclose.
This is the biggest area of concern that buyers want to know about. Does the roof leak? Has it ever? Are there cracks in the foundation? Is the plumbing or electrical in need of service? Are there critters living in the attic or crawlspace? Do all the appliances work?
Basically, a “material defect” is defined as anything a seller has current actual knowledge about that would devalue the property in the buyer’s mind.
Failure to disclose seasonal problems are common – like a spring downpour where water seeps through a foundation wall – but is also dangerous for a seller because sellers can be on the hook for what they disclose (or fail to disclose) for up to ten years.
For homes built prior to 1978, does the house contain lead-based paint? Is there asbestos? Does the house have a high radon reading? (More often these days, buyers do a radon gas test as part of the inspection process.)
Zoning and Other Issues
Is the vacant lot behind the property about to become a gas station of fast food outlet? Is the neighbor planning to build an addition on their house that will block the view of the mountains?
In Colorado it is not mandatory for a seller to tell a buyer of a murder or suicide committed on the property or in the house. However, things like this are generally recommended to a seller to disclose.
How do most buyers discover that a seller knew about a particular problem? Neighbors! From past conversations to service vehicles spotted at the house, neighbors know a lot.