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Austin home-selling: Will I Have To Fix The Things I Disclose?


You might need a bit of caulk in that one though

I have a home seller contemplating the first offer they have received for their home. They are concerned that they will have to fix everything that they have disclosed in the sellers disclosure. In their instance, the disclosure contains a prior inspection report that they ordered when they bought the home, less than four years ago.

Here are my thoughts. Everything that is in the sellers disclosure does not necessarily have to be fixed. It depends if things are asked for in the initial offer or not. Here’s why:

  1. The purchase contracts here in Texas have an option period built into them, and also a space in which to ask for repairs when the offer is initially presented.
  2. The seller is not obliged to fix anything unless they agree to in writing. Everything is negotiable of course.
  3. If the buyers’ lender requires a repair in order for the home to be loan-worthy, then no-one is obliged to do them and the contract can be ended with a return of the earnest money to the buyer.

One thing that I always advise sellers to do is to fill in the sellers disclosure with as much detail as possible, and give it to me before we tell the world the home is for sale. That way I can furnish the disclosure to any agent wanting to bring an offer. It’s a small detail, but it allows offers to come in with all of this information already on the table, and removes a contingency that is neither required, nor serves the seller well.

Given that any known issues are disclosed, the buyers will have read about them before submitting a contract. I fully expect any repairs about known issues to be requested in the first version of the purchase contract or not at all. There’s a paragraph in the purchase contract that reads as follows:

Notice to Buyer and Seller: Buyer’s agreement to accept the Property in its present condition … … does not preclude Buyer from inspecting the Property… … from negotiating repairs or treatments in a subsequent amendment…

In practice, I read this to mean that new items discovered in the buyers’ option period (typically from an inspection) may surface in later rounds of negotiation. Not items already disclosed. If something in the original disclosure comes back in a later amendment I advise the seller to throw it out.

Now some people may think, “well your mileage may vary as anything is possible in a negotiation”. And I admit that negotiating is very different in different cultures and much depends on the negotiating style of the buyer and their agent. That said, it’s good to have a stance and to not think twice about reacting calmly and predictably if and when the other side acts irrationally.

So everything you disclose does not have to be fixed, it depends on how you and your agent negotiate. If things aren’t brought up in the original offer, and the buyer has already received the sellers disclosure, then you do not expect to fix them as part of any later agreement.

If you want more information on what is reasonable in a negotiation, you can check out this excellent post on Steve Crossland’s blog. Get in touch if you want to find out what a Certified Negotiation Expert can do for your home sale. 512 215 4785.

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