Buying and selling real estate may be one of the most important financial transactions that you will ever carry out in your life, but it’s also a lot of work. If the property in question has issues due to poor maintenance, natural conditions, or other factors, correcting these issues can be expensive and can complicate the sale of the property. The last thing that a buyer or a seller wants are complications that will slow or block the sale of property.
Here’s The Situation…
So what if it turns out that the property you are buying or selling has some major problem that will be costly and time-consuming to fix? What’s the right move? If you’re selling a property, do you sell for less “as is,” or do you invest the resources necessary to fix it? If you’re buying an “as is” property, do you understand the full scope of the outstanding conditions?
Sellers who find themselves in this situation may be tempted to try to sell the property as quickly as possible, without correcting these problems. They may need to make some compromises on the sale price, but it will help them move on quickly and painlessly. After that, it’s the buyer’s problem, right?
Likewise, buyers may be willing to accept a property with some issues if it means they can move in faster at a lower price. Of course, they will need legal assurances that the issues with the property have all been disclosed. The last thing they want is to buy a new house, only to find out that the issues with it are far more significant than they were led to believe.
These situations are very fragile, and good faith will only get you so far, so let’s talk about this concept of legal assurance…
Legal Documents: Disclosures & Disclaimers
Before buying a piece of property, it is extremely helpful to get a real estate attorney involved to assist in preparing any and all legal documents that may be required. Note that your real estate agent cannot help with this; this is something that only a real estate attorney can do.
When it comes to addressing the condition of the property that is changing hands, there are two documents in Tennessee that are commonly signed by the seller. Those documents are as follows…
1. Property Disclosure Statement
The first document that may be introduced in the sale of residential property is called a Property Disclosure Statement. Sellers in Tennessee are often required to sign one of these to guarantee that they have been honest and forthcoming about the condition of the property they are selling. If the buyer discovers undisclosed problems with the property they have purchased, they will have strong legal grounds to pursue the seller for the value of the related expenses.
As an alternative to Property Disclosure Statements, sellers in Tennessee can instead present a Residential Property Condition Disclaimer. This document will effectively exempt the seller from legal liability for the condition of the property after the sale. In this scenario, the buyer would waive the required Disclosure, and forfeit their right to pursue the buyer for issues with the condition of the property they are purchasing.
The moral of the story is that a good real estate lawyer is worth their weight in gold. Nobody—not your friends, your family, your real estate agent, nor any faceless internet writer—can replace having an actual attorney on your side. Buying and selling real estate is complex, and you need to make sure that everything is done right the first time around. Otherwise, things may come back to haunt you in very expensive ways!
Are you looking for a real estate lawyer? We can help! Get in touch with us today to take the first step towards buying or selling real estate the right way.