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How important are disclosures in real estate deals?

On Behalf of | May 30, 2023 | Residential Real Estate |

When buying and selling property in Rocky Mount and throughout North Carolina, there are bound to be feelings of excitement combined with trepidation at such a major financial agreement. This is true from the perspective of the selling party and the purchasing party. It can be easy to forget key aspects that included for the deal to be completed.

One area that must be fully understood is making the required disclosures and what recourse is available if these disclosures are not provided. The law dictates what disclosures must be given, when they must be made and if the contract can be canceled if they are not done based on the law. Since these are complex issues that people might not fully grasp, it is useful to have professional assistance throughout the buying and selling process.

What are the required disclosures under state law?

The owner must give the buyer a residential property disclosure statement. There are key pieces of information that need to be included. The property will be in a certain condition at the time it is being sold. Its condition will need to be described to the buyer, as far as the owner is aware of it.

The owner needs to say that they are making no representations as to the condition or characteristics of the property or any improvements unless it is clearly detailed in the contract. If there is damage, that must be shared. The owner will not make any changes after giving this disclosure.

There is a standard disclosure statement that the state’s Real Estate Commission requires. It discusses the basics such as the water supply; how sewage is disposed of; the structure such as the roof, foundation and floors; and the inner workings like the plumbing, electricity, heating, cooling and mechanical systems.

It must also state if there are insects and other pests that destroy wood; what the zoning laws, restrictive covenants, building codes and land-use requirements are; and if there is asbestos, lead-based paint or other dangerous substances in or on the property.

The disclosure must be given within a specific time-frame. If it is not, then the purchaser has the right to cancel the contract. This must be given to the purchaser when they make an offer on the property. It can be part of the real estate contract, an addendum or separate from it entirely.

If it is not delivered within this time-frame, then the contract can be canceled. However, that right to cancel the contract has a time limit. After the purchaser receives the disclosure, they have three calendar days to cancel. There are also three days after the contract was made. To cancel the contract, it must be done according to the legal requirements. That includes giving written notice to the owner or the owner’s sales representative.

Mistakes with disclosures for real estate can be costly and having help is advisable

People who are buying or selling residential real estate might not have a great deal of experience in these matters. The entire process can seem overwhelming with so much paperwork and rules that must be followed that they are unsure of how to do it all based on the law.

These factors are crucial as any misstep can be costly financially and personally and even undo the agreement entirely. People could lose out on a property they really want or they might end up buying something that, if they knew about its issues, they otherwise might not have bought.

From the start, it is wise to be fully protected. That includes knowing the law, having advice with deciding whether to move forward with the agreement and if there are ways to settle any minor or major disputes. Contacting professionals who are skilled in these specific matters is a first step to a fruitful real estate transaction.