Due Dilligence of the Seller when listing a home
Property Inspections are Critical in Missouri Part 2
As discussed in Part 1, caveat emptor is a Latin phrase that literally means “let the buyer beware.” It is the principle that the buyer is solely responsible for checking the quality and suitability of the property before the purchase is made. Caveat Emptor, as it applies to Missouri law encourages responsible, prudent conduct by the purchaser and discourages unfair dealing on the seller’s part.
This information is important to fulfill the due diligence of the sellers responsibilities, which is to ensure the real estate transaction goes smoothly and successfully.
Dilligence of the Seller
Due diligence, as it relates to the seller, refers to the reasonable steps the seller must perform to ensure a successful real estate transaction.
There are many parts of the structure and operating systems in a home that age and require maintenance over time, so although the seller is not obligated to have a home inspection done prior to selling the home, a prelisting inspection inspection affords the seller the option to make the repairs in advance of listing the house, or to factor the cost of the repairs into the selling price.
By having a comprehensive prelisting inspection done, the seller will be able to get a good idea of how the buyer may want to negotiate, and the seller will be confident that the list price is fair and reflects the true condition of the home.
The seller may obtain the portions of the report the buyer wishes to have addressed or be compensated for in the transaction. In Missouri, the seller does not have the right to obtain a complete copy of the buyer’s inspection report unless the seller pays for it. Most home inspection reports are copyrighted and protected by Federal copyright law.
Mandated Real Estate Disclosures in Missouri
Did you know that when someone In Missouri sells their home; they have no legal obligation to disclose anything about the home except:
1. Methamphetamine-related activity. Missouri Rev. Stat. § 442.606 basically states that that seller must disclose to the buyer in writing if the property was used as a site for methamphetamine production, whether or not there was a conviction, or if the property was the place of residence of a person convicted of any crimes involving methamphetamine production or the storage of any chemicals used in the production of methamphetamine.
2. Landfills. Missouri Rev. Stat § 260.213 This mandate says that a seller must disclose to the buyer whether the property contains a permitted or unpermitted solid waste landfill or demolition landfill and its location on the property.
3. Water damage and mold. The seller must disclose past water and mold damage. (A good home inspector will be able to identify past water damage areas even if there has been an attempt to cover up the damage.)
4. Registered Sex Offenders. The seller must disclose whether a registered sex offender lives in the neighborhood.
Additionally, federal law requires sellers of homes built before 1978 to disclose lead-based paint and other sources of lead to prospective buyers.
Missouri realtors are beginning to recognize the benefits of seller disclosure. Although caveat emptor is the prevailing law in the State of Missouri, many realtors are becoming proactive. They are encouraging the sellers they represent to be forthcoming about any issues they know about to avoid potential litigation and complications down the road.
Here is a story to illustrate this point. In a recent transaction, the seller did not disclose the knowledge of a recurring drainage problem that was causing mold in the home. The new owner had a plumber come out to fix a leak, and he mentioned that the former owner had always had problems with the plumbing and had a chronic mold problem. He was surprised that no one told them about these issues. This situation can compromise both the seller and the realtor later, and they can be taken to court over a nondisclosure issue like this.
The inspection report is a proprietary work product. Although it is not required by Missouri real estate law, the seller can order their own inspection report to learn about the condition of the home prior to listing. In a caveat emptor State, like Missouri, the seller has no legal obligation to have the home inspected. If the seller obtains a copy of the inspection report without paying for it, this is legally referred to as “unjust enrichment,” and the home inspector is entitled to all statutory restitution.
If the seller wants to ensure their real estate transaction goes smoothly, it will be a good idea for them to hire a company like Pillar Premier Inspections to identify the deficiencies in their home. This will allow the seller and realtor to set a fair price for the home and to anticipate areas the buyer may want to negotiate. It also gives the seller time to make any repairs in advance of listing to ensure the transaction goes smoothly.
As long as caveat emptor is in place this decision will continue to be a moral one, but any good, ethical, realtor will see the benefits of encouraging the seller to have a home inspection done before listing the home.
Pillar Premier Inspections provide home and commercial property inspections in Lake of the Ozarks, Springfield, and throughout the Central Missouri area. We hold a number of home inspection certifications, memberships, and licenses in Missouri. We represent home buyers and sellers, commercial property investors, relocation companies, and more. We offer a variety of inspection services, including mold testing, septic system and well inspections, and more. Our decades of custom home building experience combined with our knowledge of home and commercial inspection separates us from the competition.
Call us today! Lake of the Ozarks (573) 363-5511, or Springfield (417) 893-0770.