How Can Homebuyers Protect Themselves from Hidden Property Issues?

To protect themselves from hidden property issues, homebuyers must be proactive during the buying process. Conducting thorough due diligence and getting professional advice can help avoid costly surprises.

Steps to Protect Against Hidden Issues

1. Hire a Qualified Home Inspector: Before finalizing the purchase, hire a certified home inspector to check for hidden structural issues, plumbing, electrical systems, mold, and other potential problems.
2. Request a Property Disclosure: The seller is legally required to disclose known issues with the property. Ensure you receive a comprehensive disclosure statement and review it carefully.
3. Review the Property’s History: Look into the home’s past for any prior damage, repairs, or legal disputes, such as previous insurance claims or lawsuits.
4. Consider Title Insurance: Title insurance can protect against hidden legal issues, like unresolved liens or ownership disputes, that could arise after purchasing the property.
5. Verify Permits and Renovations: Make sure any renovations or additions to the property were done with the proper permits and meet local codes.
6. Negotiate Contingencies: Include contingencies in the purchase agreement that allow you to walk away or renegotiate the price if significant issues are discovered during the inspection.

Legal and Insurance Protections

• Home Warranty: Some buyers opt for a home warranty to cover certain repairs and damages for the first few years after purchase.
• Consult a Real Estate Lawyer: A lawyer can help review the purchase contract, ensure the terms are favorable, and advise on any legal risks regarding undisclosed issues.

Example

A homebuyer in search of a new house hires an inspector, who discovers significant water damage in the basement, previously covered up by fresh paint. The buyer uses this information to renegotiate the price or request that the seller address the issue before closing.