A tool kit for home buyers to help avoid potential pitfalls
By Amanda Abrams,
So you’re house shopping and you’ve fallen hard for a sweet little gem that seems, well, perfect. The photos are lovely, the walk-through revealed a number of amenities you’ve been seeking, the location is ideal.
This is it, right?
Not necessarily. A house — even a brand-new one — comes with a history and literally thousands of diverse components, some of which could be defective and cost big bucks to fix. A buyer’s ability to diagnose potential problems during a short visit? Limited at best.
As a result, shopping for a home, like any potential relationship, can include elements of uncertainty, surprise and trepidation.
“I’m super paranoid,” says Jacob Moschler, a Hyattsville resident who’s been gradually moving toward homeownership with his wife, Thuan Do, but is nervous about choosing a home that winds up having a host of problems. “That’s one of the reasons we haven’t bought a house yet.”
A buyer, though, doesn’t have to jump wholly unaware into the unknown. There are a number of ways to gain information about the property — both its physical condition as well as its past — before buying.
There are several tools and sources to help you feel a little more secure before signing on that dotted line. Some are mandated by law, while others simply require a little extra legwork.
States and status
The first thing to know is that the District, Maryland and Virginia each holds home sellers to different standards of disclosure.
The District has the tightest standards; a seller is obligated to fill out a detailed form outlining the state of a range of components — including the roof, chimney, plumbing and electrical system — related to the house. Virginia, in contrast, is a “caveat emptor” state. That means sellers don’t have to fill out any form detailing the property’s condition; buyers largely have to unearth that information on their own.
Maryland’s system is a hybrid of the two. Sellers can choose to disclaim — that is, to give no additional information about the home — or they can fill out a disclosure form.
Those are the real estate laws. But common law in all three jurisdictions requires sellers to disclose any “latent defects” they know of that affect the property — problems that pose health or safety dangers but can’t be discovered by a reasonably thorough inspection before sale. That might include a rotted supporting pillar or a flawed electrical system whose malfunctioning isn’t apparent without deep investigation. After all, for a seller to pretend that a home functions well when he knows it doesn’t is fraud. And that’s punishable in court.
So all Washington area home buyers have that layer of protection. A second, broader one comes in the form of the agent selling the property. In all three jurisdictions, the seller’s agent is required to disclose any material fact that he or she knows or should know relating to the property. Translation: If agents or brokers are aware of a problem that might affect the buyer’s decision about the house — or if they should know about an issue, given their expertise — then they are obligated to tell it. This includes a much wider group of issues than the latent-defect category — for example, a leaky roof or basement that floods both qualify as material facts.
Real estate agents say this is a rule most of them follow carefully. After all, their livelihood — in the form of an intact license and a stellar set of references — is on the line. “My personal law is disclose, disclose, disclose,” said Bonnie Casper, a Long and Foster agent in Maryland. “I won’t lose my license or harm my reputation because of one sale.”
Agents and brokers, then, are a buyer’s allies — but only to a degree. The material-defect law covers only a home’s tangible elements. So if the property has a shady history or is surrounded by a rowdy community? No one’s required to tell you any of that stuff. And if they think you might not want the house as a result, they probably won’t tell you.
Even with the various disclosure laws, there’s a fair amount of gray area, especially when it comes to radon, lead, asbestos, contaminated soil and other toxins that can make residents sick.
Luckily, most of them are pretty rare these days, but it’s important to check anyway via a trained home inspector. In many cases, sellers don’t realize they have a problem.
Take radon, for example. Readings for this odorless gas that comes from the ground have traditionally been low in this area, and most sellers likely believe it’s not an issue for their property. But ever since the August 2011 earthquake, radon numbers have spiked — so don’t make any assumptions.
Contaminated soil is a different issue, though, that many real estate agents say isn’t covered by disclosure laws. Sometimes the problem is so well-known that potential buyers can’t miss it — like in Spring Valley, the Northwest Washington neighborhood that was once a munitions dump. But others potentially toxic properties, including brownfields, may be less known and not on a home buyer’s radar.
“As a buyer’s agent, I say to my clients, ‘Research brownfields and see if you want to live there,’ ” said Joe Himali, principal broker for Best Address in the District. “I don’t want to be the next agent who sold in Love Canal.”
Indeed, the best recourse for would-be buyers in this case is research, research, research. Online databases of local environmental reports can be a source of the land’s history. Avery Patillo, owner of the Alexandria-based inspection firm Fusion Services, recommends Environmental Data Resources (www.edrnet.com) and FirstSearch (www.efirstsearch.com), though he says the information they provide may need to be navigated and translated by a professional.
Mold is a toxin of sorts, but many real estate professionals say it belongs in a class of its own, as far as difficult disclosure issues go. First of all, said Stacey Sauter, a Long and Foster agent in Potomac, mold is often smelled but not seen. And it’s possible, she said, that “the seller may have been living with the smell for so long that they don’t notice it.” Therefore, it’s up to the buyer to catch the problem.
Another difficult issue is one of remediation. If a homeowner thinks she has fixed the problem, she may think she doesn’t need to mention it to prospective buyers. But mold can be insidious. “One day you splash it with Clorox so it’s gone — but unless you’ve remediated the moisture issue, it will recur,” said Jay DeBoer, vice president of law and policy for the Virginia Association of Realtors.
In both cases, a skilled inspector — particularly one with expertise in mold-related issues — can help clarify whether something serious is occurring and roughly how much it will cost to fix.
A questionable past
“Stigmatized property” laws around the area bar disclosure about whether a home was the site of a homicide or suicide, or whether a former owner had a deadly disease. That means sellers and their agents are under no obligation to tell buyers if something horrific occurred on the property. And for some buyers, that’s fine: They don’t really care.
For others, the idea of living in a house where someone died freaks them out.
Talking to neighbors or Googling the property are options for learning about a home’s past — though if it has a grisly history, there’s a slight chance the owners have changed the address in an effort to avoid that kind of detection.
Which means sometimes intuition is the best guide.
“A couple years ago, I sold an expensive house in Georgetown,” said Sauter, the Potomac agent. It was an odd house, she said: The living room and master bedroom were huge, the other rooms small and one bathroom was painted and tiled in black. Then there was the basement: “The buyer kept getting the creeps when she went down there.” Eventually, the client decided she didn’t want the house, and Sauter got her out of the contract. “And the very next day,” Sauter said, “I found out it was a former mortuary.”
The most confusing issue might be if a home was used as a methamphetamine lab. Granted, that’s not common in this area, but it could be a health hazard as the chemicals used to make the drug can become embedded in a home’s frame and make its residents very sick. But so far, there’s little agreement over whether it qualifies as a material defect, and none of the area’s jurisdictions make a specific allowance for it.
The buyer’s tool kit
What about bedbugs and termites, a sex offender living nearby, or a planned-for-but-not-yet-under-construction highway? They’re all categories in which a buyer may not get any information at all from the seller or his agent ahead of time.
Ultimately, prospective home buyers have two key tactics. The first is a careful home inspection by a highly regarded professional. According to most of the agents interviewed, it’s an absolute must — even if the house is new, and even in the case of a sellers’ market, when time is of the essence.
Second, buyers need to do due diligence and research the property. Don’t just look online; wander around the neighborhood and talk to residents. It works.
“One client experienced backed-up sewer lines [in the house] on the day of the closing,” said Christopher Darby, a lawyer with Counselors Title. His client immediately asked around, “and one of the neighbors said: ‘Are you kidding? The sewer people were out here last month.’ ”
Amanda Abrams is a freelance writer.