Some property defects are obvious and easy to identify. Even people without any training may notice cracks in the drywall or aging light fixtures during their initial tour of the property. They can then factor those defects and any issues reported by the seller on disclosure documents into the offer that they make.
Buyers also typically rely on the review of an inspector. Inspections are typically mandatory when buyers use mortgages to finance real estate transactions. Ideally, any problems with the property are easy to identify by reviewing disclosures, touring the property and paying for an inspection.
Unfortunately, latent defects can be hard to identify even when buyers try to perform their due diligence. Issues with the foundation, wiring, plumbing or other key systems of the home may only come to light after the buyer takes possession. How can buyers cover the costs of significant latent property defects after they have already closed on a home?
By holding professionals accountable
Buyers should be able to trust that the inspectors who review their property do a thorough and professional job. However, some inspectors rush through the process or lack the experience necessary to identify latent defects.
If a review of the inspection report makes it clear that the latent defects went unnoticed by the inspector, they may have professional liability for those defects. Their professional insurance coverage could help compensate the buyer for the cost of making repairs or the reduction in fair market value associated with those latent defects.
Occasionally, it might be possible to hold the seller’s agent responsible. If there is reason to believe that the seller’s agent knew about the defects and did not push the seller to make the necessary disclosures, then the buyer may have grounds to pursue a claim against the seller’s real estate agent.
By filing a lawsuit
Perhaps the purchase was a cash purchase without a lender. The buyer may have waived inspections under the assumption that the seller had made appropriate disclosures.
In such cases, buyers might be able to take direct legal action against the former owner of the property for misrepresenting its condition. The violation of disclosure statutes can leave sellers vulnerable to legal action.
Reviewing disclosure documents, inspection reports and other paperwork from a closing can help frustrated buyers determine their options after a disappointing residential real estate transaction. Buyers facing major repairs or diminished property values may need help holding sellers or real estate professionals accountable for latent property defects.