Not revealing known property defects to a buyer\u2014a common problem in real estate, studies show\u2014can land you in court. Follow these best practices to avoid liability.<\/p>\n\n\n\n
When a home buyer discovers a property defect that wasn\u2019t disclosed by the seller or listing agent, the buyer may sue, claiming the home was misrepresented. This has become a more urgent problem in real estate since buyers in last year\u2019s frenzied market started waiving the home inspection contingency to win bidding wars<\/a>. Sixty percent of sellers admit to not disclosing a known problem with their property to buyers, according to a July study from Cinch Home Services(link is external)<\/a>.<\/p>\n\n\n\n \u201cFailure to properly disclose can lead to misrepresentation claims, ranging from fraud to negligence and, in some states, innocent misrepresentation,\u201d Deanne Rymarowicz, associate counsel at the National Association of REALTORS\u00ae, warns in the latest \u201cWindow to the Law<\/a>\u201d video. She cites a court case in which an agent was ordered to pay $170,000 after being found to have shown a \u201creckless disregard for the truth\u201d by not disclosing a listing\u2019s prior water damage.<\/p>\n\n\n\n Rymarowicz offers best practices to help avoid a misrepresentation claim due to the failure of the seller to disclose:<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n\n