"Due Diligence, or Caveat Emptor"

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From: Tim S


I may go down the path of selling a property directly, i.e. bypassing agents. What level of disclosure is required about any potential problems with a building or property? Agents are supposed to adhere to some standards of ethical conduct. Well, aren’t they?? What about those of us trying to direct-sell?
I think that I just have to present the property without making false claims. Does my liability go any further than that? Is it purely up to the buyer to ask the right questions, get a building inspection etc., if they can be bothered? Is there a difference between commercial & residential?

Please forgive my anonymous post.

Tim(id) Shark
 
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Reply: 1
From: Kristine .


Tim

One of the reasons people engage a licensed agent is so that the legal process is properly followed.

Of course you can market and sell your own property. Many people do. Depending what State you are in, depends what information you have to have in your vendors statement or disclosure.

Just because you no longer like the house or the neighbourhood does not have a material impact on a property, but if you know that a major hot food outlet, for example, is going to be built within smelling distance of your house then I, for one, would certainly make sure that prospective purchasers were advised to make their own enquiries regarding planned redevelopment of the commercial neighbourhood.

If, however, your question " What
>level of disclosure is
>required about any potential
>problems with a building or
>property? " implies that you know of some material or significant fault, be aware that the law always asks 'what was the intent of the action?' and if your intent is to conceal issues which, in your opinion (and that is why you are not telling) will impact adversely on the property then agent or no agent, it is your intent which could be questioned should your buyer feel that important information was withheld at the time of the sale, causing disadvantage (financial, emotional etc) to them.

And yes, it is fashionable to adopt a condescending attitude to agents, but estate agency work is one of the most regulated industries with a very high level of public scrutiny and accountability, and with one of the lowest levels of professional misconduct. And after all, an agent only knows as much about a property as a vendor chooses to disclose.

Good luck with selling your own property Tim, contact your State department of fair trading or consumer affairs for detailed information of your legal requirements, and engage a solicitor or conveyancer to prepare contracts and other relevant documentation for you before you put the property on the market.

Cheers

Kristine
 
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Reply: 1.1
From: Tim S


Thanks Kristine,
Helpful as always. I don’t think any of us will be actively pointing out faults to our buyers, but it is prudent to be aware of what could come back to bite us. I guess wrappers need to be aware as well.
To your comment about agents; fair enough, I probably was a bit condescending, there are many good agents out there. I really mentioned them to acknowledge that they are regulated and accountable but I want to know how accountable we are as private sellers in terms of disclosure.
I want to contact my list of potential buyers first for 2 reasons. To save the agents fee, and secondly, because I can do a better job of selling the potential and the business sense of having the property to a handful of buyers that I can think of. If that doesn’t work, the agents will have their chance.
Thanks again, I’ll check out Consumer Affairs etc.

Tim(id) Shark
 
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Reply: 1.1.1
From: Greg Mowat


I've sold a property privately and it's really a piece of cake. Most of the risk is on the buyers side and it is their due-diligence (within reason of course and you can't be misleading)

However it always reminded me of a US movie I watched 10-15 years ago where this guy goes to buy a house.
He's met at the front door by this really friendly guy who's full of jokes and enthusiasm. As they walk through the house the buyer comments on different features, the front door, fridge, fireplace, pool, etc. The seller responds happily "we're taking that with us! Only joking" or "we're taking that with us!" and with a laugh walks on.
The guy buys the house and on settlement walks in the front door to find fireplace missing, the pool's been dug up, etc, etc.

He tracks down the seller in Silvestor Stallone fashion but has no-where to go as the seller recorded the inspection and just took all those things where he didn't say "only joking"

Obviously only a movie taken to extreme but it makes you think.....
 
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Reply: 1.1.1.1
From: Michael G


Greg,

It wasn't some US bootcamp seminar video was it?

Michael G
 
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Reply: 1.1.1.2
From: David Lutan


Greg,
Recall the movie - it was a Chevy Chase movie. Although it was very extreme, I learnt to insist on having items which could cause confusion on the Contract of Sale. In my case, about 3 years ago when I purchased a property I insisted the specialised TV aerial and air conditioner where listed. Luckily I did, because the seller intended to take these items. Other things such as a "built-in" ironing board (which I assumed would have to stay and hence did not list on the contract) where removed and the wall patched up! My recommendation - if in doubt, have it listed!

Dave
 
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Reply: 1.1.1.2.1
From: Stirling Reid



Watch out for plants. Contract can state that all potted plants are not included in the sale. What the buyer did not realise was that the whole garden was potted pots sunk into the ground with bark chips covering the pots. The vendor then took the whole garden with them.

Stirling
 
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Missing items at settlement...

Reply: 1.1.1.2.2
From: Ross Sondergeld


Hello everybody...


Subject: Due Diligence, or Caveat Emptor

Greg said, "I learnt to insist on having items which could cause confusion
on the Contract of Sale. In my case, about 3 years ago when I purchased a
property I insisted the specialised TV aerial and air conditioner where
listed. Luckily I did, because the seller intended to take these items.
Other things such as a "built-in" ironing board (which I assumed would have
to stay and hence did not list on the
contract) where removed and the wall patched up! My recommendation - if in
doubt, have it listed!"


I'd also recommend taking photographs of the property and the important
items.

In one of my buyer agent deals... we found out 1 year later (when the family
went to do a reno) that the previous buyer STOLE the built-in sound system
in the master bedroom and covered the wall with masking tape and painted
over it prior to settlement. (* It was a luxury waterfront home.)

Be careful... insert an inventory if required into a contract of sale... and
take photos... and do a walk thru prior to settlement.




Ross Sondergeld ~ Buyer Agent

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...with a Buyer Agent on your side!!! "

Buyerside Real Estate Mobile 0412 289 464
Office 9b, 34 Glenferrie Drive Office (07) 5562 1555
East Quay Corporate Park Fax (07) 5562 1248
Robina QLD 4226, Gold Coast Buyerside@hotmail.com
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