As the housing market becomes a little less competitive, buyers might get pickier when it comes to the conditions of the homes they're purchasing, and one big legal problem could cost home sellers tens of thousands of dollars.
If sellers are dishonest about major problems with their home, it could come back to bite them.
"For instance, if a roof is leaking, that is something that a seller would be expected to reveal to the buyer," said Eric L. Nesbitt, a real estate attorney.
Nesbitt said structural damage, previous flooding, the home's source of drinking water and whether the home is part of a homeowners association that requires membership and assessment fees are just a few things that home sellers must disclose to buyers if the seller has knowledge of them.
Buyers can take legal action against sellers who don't properly disclose all of the necessary information.
"They can pursue the seller for fraud, for failure to disclose, again, because that's the law," Nesbitt said. "That's a statutory right under the state of Colorado."
The seller may have to pay the buyer the cost of repairs. Alternatively, if the house is found to be worth less than the buyer paid because of the undisclosed problems, the seller may have to pay the buyer the difference.
On the other hand, sellers are only required to disclose the major house problems they know about. That's why real estate agent Jeremy Jerez said buyers should be careful about waiving inspections.
"I think there's definitely a financial gamble there, right?" Jerez said. "You're rolling the dice if you start to waive things. That's when things start to get sticky."
Jerez said that potential home buyers who are waiving inspections should be financially prepared to fix problems they didn't know existed.
Unlike some other states, sellers in Colorado don't have to disclose if someone died in the home. If that's something you care about as a buyer, be sure to ask.
