Sellers Disclosure; Can you trust anyone?
Florida Real EstateTransactions involve hundreds of thousands of dollars…sometimes even millions, which often brings out greed in people.
Sellers want to sell for top dollar and at the same time, keep the buyer happy. That means that many times, sellers will minimize, deny, omit and NOT tell the truth about their property or known deficiencies.
Per a recent Florida Realtors (2022) article, The study found that 94% of sellers admitted that they didn’t disclose a known issue.
READ IT HERE
Yes, that statistic is high, but I believe the stats are actually higher than that, because they did not poll the sellers' agents…that's another story.
It's a fact that people lie. They lie about college degrees, their income, their jobs, and even cheating. Sellers and their agent will justify ”pretending” there are no house problems in order to keep a buyer locked in the deal and the seller content.
Sellers will hide the deficiencies of the home they are trying to sell to you and their agent will just pretend they don’t know anything about any deficiencies. Many will claim it is in “perfect” condition.
I have owned several Real Estate Offices in major Florida cities and have concluded that the Tampa Bay Sellers are the least likely to provide accurate disclosures, and prefer to check the box that says “Don’t know”.
Sellers Brokers complicate matters by making excuses for the seller. If you think that all brokers are always honest, knowledgeable and trustworthy, think again...
Google “The Danger Report”. It is a report that was commissioned by NAR (the National Association of Realtors) to study the problems with real estate today. It is a 164 page report that is so critical of realtors that NAR is now trying to hide the results.
The report concluded that the #1 Liabiity for the Real Estate Industry is its masses of “Untrained, Unethical and/or Incompetent Agents”.
Here’s what a seller's agent will say…
The seller's agent’s typical response to any disclosure issue or question about a property deficiency is:
- I don’t know what you mean…
- Never heard of it…
- It’s grand-fathered in…
- No one has complained…
- The seller bought it that way…
- I have not seen a report…
- Seller never lived there…
- Please don’t send me the inspection report!!!…
The more money that is involved in a real estate sale, the more likely it is that someone is hiding the ugly truth somewhere…which is exactly why every homebuyer should work with an Exclusive Buyers Agent (Buyers Broker of Florida 727-202-9130) that will dig deep to uncover the truth about the property.
So what is Florida law regarding Sellers' Disclosures?
Sellers and their agents are required to disclose any material fact that is not readily observable to the home buyer or something that may simply be a “material” turn off to the buyer, or something that would make the property less valuable.
In addition, the seller is supposed to disclose any issues that have already been fixed or still need to be fixed.
While Florida Law does not mandate that the disclosure must be done in writing, everyone that knows about a house problem is required to disclose in a timely manner.
A disclosure is not a disclosure when it is given AFTER the fact or when it is too late to do something about it. It must be given timely...before it is too late to negotiate.
Under Florida law, a buyer can sue for damages, and even rescind a transaction, where a seller or real estate agent doesn't reveal a material problem with the home prior to purchase.
A seller may be liable to the buyer for the nondisclosure of material facts, negligent misrepresentation of facts, intentional misrepresentation of facts, or suppression or concealment of facts.
The only thing that a seller or sellers agent is not required to disclose in Florida is murder or suicide.
Personally, I do think that murder or suicide should also be disclosed because for some home buyers that would be a material fact negative enough for them NOT to want to buy the property. I know for a fact that many of our buyer clients would want to know about that…and I certainly would tell them.
Do Sellers and their agents disclose? Of course not…
Sellers think “disclosure” is no big deal and many listing/sellers agents go along with not disclosing the problems that they know of.
I think back to all the times my buyers canceled a contract over serious deficiencies with the property inspections. Did the seller's disclosure get revised and corrected with the newest information?
Never…not even a single time!
The listing agents will never call the seller out for non-disclosure because they want to keep their seller happy so that the seller recommends them to their neighbors and friends…I have even had sellers agents tell me that.
I also had sellers agents ask me “not to tell the buyer”...sorry, I tell the buyer everything.
It is common for a seller's agent to ignore anything that may cause a real estate contract to fall apart. Traditional sellers agents think that a buyer canceling the contract should be avoided at all cost so they will say anything to keep the transaction going…that includes not disclosing issues, minimizing problems or flat out lying…
Do sellers and their agent actually LIE? Absolutely!
Just last month: (August 2022) not only was the seller a blatant liar, so was the agent: Seller claimed on their seller's disclosure that there are no assessments for the property….Seller checked “NONE” Yet they had received a certified letter clarifying a large $2K assessment.
The listing/sellers agent on the other hand did not disclose that same $2000 assessment (that she knew about) until after the purchase contract was signed.
The seller's agent waited for one hour after we received a mutually accepted contract and then proudly disclosed that she knew about the assessment last week.
When I called out the sellers agent out for violating the code of ethics and blatantly lying in the email she sent me, her response was “I didn't mean send you that e-mail.”
Personally, if I discover something that will turn the buyer off from the purchase, I do tell the buyers. I think that all buyers should know exactly what they are buying and if they decide not to buy….so be it.
I started the first True Buyer Brokerage office in south Florida as an Exclusive Buyers Broker 30 years ago, after getting cheated in a real estate transaction. I quickly realized how easy it is to deceive the buyer because no one cares.
We are different…we do care.
Which is why we choose to only represent buyers and never sellers. 727-202-9130.
Read "our story" here…
How to spot a Fake Sellers Disclosure…
Read carefully and mark all the areas that are either blank or are filled out by saying “don’t know”...If you scrutinize the disclosure you will notice that some answers just don’t make sense.
For example: Sellers will claim that they have no clue how old the roof is, how old the a/c is or what kind of plumbing they have, yet they owned the house for 33 years.
Common sense says that's a lie…everyone who has owned a house that long has had problems with a roof leak, or had to replace the old A/C and they do know about the property…they just don’t want you to know.
Just last week during a showing of a waterfront property: the seller/owner/agent claimed to know nothing about the property. I pulled the old listing on the property and read the seller's disclosure which the current owner was given 5 years ago when he bought it.
At that time, (per the previous seller's disclosure) the roof was 20 years old, and the a/c was 16 years old. So now the roof is actually 25 years old and the A/C is 21 years. Yes, that is a problem for any current buyer looking to get good insurance coverage.
I have no doubt that this sneaky owner/agent knows perfectly well that these high cost items are way past the useful life expectancy of the property. But he was not disclosing…he just pretended not to know.
Some sellers and their agents think it is up to the buyer to learn about the property without their help…yet, that's not what the law says…Florida does require disclosures.
Here’s more dirty dealings…
Some real estate offices provide the seller their own “custom altered” sellers disclosure…they even remove some of the important questions on the disclosure…like the electrical, roof, plumbing, or a/c.
Even worse, they put their company logo on a blank page and write across it “SELLER KNOWS NOTHING, THEY NEVER LIVED THERE”...and then they have the seller sign it.
Don’t believe that they really don’t know...
I own rental properties that I have never lived in, yet I do know everything about the property. The tenants complain, I pay for fixes so I know exactly which property is due for a septic pump out or which property has the loose toilet.
No one has to live in a property in order to know about the property problems. Even if they have a property management company, the property owner still knows what the problems with the house are because they are the one paying the bills.
Another true story: Before going to contract on a luxury home, the Buyers Broker confirmed with the sellers agent that the property was indeed on city water and not septic, because the buyer did not want a home with septic. Seller additionally confirmed that it was city water. During inspections the buyer's broker (Erika) got suspicious, so checked with the city.
The property was on septic! It was in such poor condition, that the septic company would not even bother pumping it out.
Buyer canceled the contract. If sellers lie about having a septic drain field, what else are they lying about??
Seller owned the property for 4 years…with no sewer bill?. Do you really think they thought that they were getting “free” city sewer? Of course not.
Then there are the home flippers…
They like to hide behind the fact that they have only owned the house for a few months. So what? They still know…
Flippers remodel to make everything look good…it does not need to be a quality rehab, it just needs to look “pretty”.
They lay new floors over the termite damage and don’t care if their newly installed cabinets are loose and don’t fit. One seller even painted the polybutylene plumbing white to disguise it, stuffed towels inside the leaking water heater and coated the master shower with epoxy and stated that the bathroom was “new”.
Investors/Flippers that remodel homes know exactly what they cheaped out on…which is why most do not pull permits. They don’t want any city inspectors looking over their shoulders or coming to the house and discovering that an unqualified handy man is attempting to rewire the electrical.
Tips a Buyer should watch out for when sorting through a sellers disclosure:
The most important things to focus on are the things that are costly to repair or interfere in the buyer's ability to get reasonable insurance.
- How long has the seller owned the property?
- What improvements has the seller made? Ask for receipts/details. Verify the legitimacy of any receipts.
- Ask your agent to search for any previous seller's disclosures.
- Ask for warranties or permits for pre-sale improvements.
Check the history of the property…Look at how many times a prior buyer walked away from a contract and what reason you were given. (It is rare that multiple buyers will walk from the same property, unless it is over unsatisfactory home inspections).
No seller's disclosure? Request one during your inspection period. I remember requesting a seller's disclosure on a large multi-million dollar property which had 2 homes, 2 pools and 2 sellers agents. Both agents said “NO” to the seller's disclosure request.
They made every excuse not to provide a seller's disclosure…”the seller knows nothing, you don’t need it, the seller has not visited the property for 5 years, yada, yada, yada…”
I persisted and the seller finally hand wrote out a seller's disclosure…it was 6 pages long and what a disclosure!…this honest home seller disclosed everything. I was grateful.
But don’t get excited…this perfect seller's disclosure is an exception and not the rule.
This seller disclosed important things such as when the house flooded, facts about the roof conditions, why the windows were foggy and tons of important things that the agents did not want the seller to say.
Use your spidey senses…don’t trust everything you are told.
The 2 Most Important Decisions a Home Buyer will Make
Which Broker to work with. Working with a Buyer Brokerage Office that never represents sellers or does not have a conflict of interest, will guarantee you total loyalty, strict confidentiality and always full disclosure.
Every Broker in Florida has certain legal and ethical duties to the consumer, depending on what “agency” the broker is.
- Seller's agent
- a Buyers agent
- an Exclusive Buyers Agent
- A Transaction Broker
- A Non-Representative.
Hire a great inspector. There is no such thing as a good “cheap” inspector. Good inspectors stay busy and they don’t discount.
What you inspect on a house depends upon what you are buying and what features the property has.
We give excellent advice on what to inspect…the final decision is always yours to make
What about a buyer that is purchasing the home “As Is” from the seller?
Many buyers, sellers and even agents mistakenly believe that buying a home “as is” means that homebuyers must buy the house with its deficiencies and no seller's disclosure is required. Not so…
In Florida, “As-Is” Contract only excuses the seller from paying for any repairs. It does NOT excuse the seller, or their agent from any legal duty to disclose problems with the home. (Rayner vs Wise Realty Co).
“Nothing is as it seems or as you think it should be…”
In the State of Florida, in order for a buyer to be represented it must be under a written agreement that spells out the duties of both the broker and the buyer. Be aware of who others are working for and what their legal obligations are to you…if any.
Just because a real estate agent has a big smile and good personality does not mean that they are working in your best interests. Most brokers in Florida work as Transaction Brokers with “0” fiduciary duties: NO loyalty, NO strict confidentiality, NO full disclosure. Learn why representation is important.
Currently there are 455,000 Real Estate Licensees in Florida. That is more than any other state including California.
Out of the 455,000 Florida licensees, less than 30 exclusively work ONLY for the buyer's best interest as “Exclusive Buyer Brokers.” in a true Buyer Brokerage Office.
It takes a committed, experienced and savvy broker to forgo listings and focus only on home buyers..
A True Buyer Brokerage’s commission is paid no differently than any other Real Estate Office. It is paid by the co-op fee from the listing office or by the seller at closing.
We welcome your call to ask us anything…727-202-9130.
This blog article was written by Eve Alexander, an outspoken advocate for home buyers rights for more than 30 years. She has taught classes on agency, ethics, negotiations, contracts, inspections and has been recognized by the courts as an expert witness in consumer lawsuits against their agents.