I have seen seller’s markets, buyer’s markets, and every market in-between over the past 15 years of selling real estate. After participating in hundreds of transactions, I still laugh when I think of the creativity of some home sellers when they try to cover up problems that will certainly be found by a licensed inspector or the future homeowner. In this article, I will point out the most common seller cover-ups that you should be aware of when searching for your new home.
Secret #1 – Water Leaks
Water always finds a way into homes – it has no emotion and tends to show up at the worst times. Unfortunately, by the time water damage shows up, it is often a much larger problem than it appears. Home sellers need to be explicit in how they detail previous water damage and how the issue was resolved. Unfortunately, “conveniently forgetting” a water issue only to have it be found by an inspector or worse yet, by the buyer right after they move in, only leads to additional stress and potential lawsuits.
I recently closed a sale where the seller disclosed no water issues throughout their time owning the home. The inspector did not find leaks as he ran water during his four-hour inspection. However, between the time of the inspection and when the home sale was finalized, the sellers chose to move out and turn off the utilities. The temperatures in Utah can drop well below freezing in the winter months. Unfortunately, by turning off the heat in the home, the water in the pipes froze and a leak developed. When my clients and I entered the home for the final walk-through, the temperature on the thermostat registered at 34 degrees, but we did not see any water damage. When my clients moved in two days later and turned on the water, multiple leaks showed up. I received a call and the following very interesting and creative pictures…
As you can see, as the sellers moved out of the home, they observed the leaks and rather than immediately calling their agent and disclosing these leaks to my clients, they chose to use their packing tape in an attempt to cover up the problem. The end result of this non-disclosure cost the sellers nearly $1,000 to correct. Had they not turned off the heat in the home this may have never happened, and if they would have called and immediately disclosed this, it may have cost $50 - $100 to correct. As we could no longer trust the sellers, we asked the plumber to look over every potential item that could have frozen and to replace it all. The moral of the story is to never cover up water issues, they will always find a way to make their presence known.
Secret #2 - Insects, Rodents, and Pests
Many people don’t think about termite infestations in Utah’s climate; however, insects and other pests are very prevalent and should always be looked for. Make sure to review the seller’s disclosures to see if the seller has disclosed previous problems and consider an additional inspection for termites, carpenter ants, mice or other pests which might be carving up the inside of your new home’s walls.
A few years ago, I represented a buyer where the home had been freshly painted, but other work was done by the sellers to improve the property. This usually would not stand out as a potential warning sign, except that I noticed inch wide trails cut through the grass in the back yard and around the property. Having lived in places where carpenter ants were present in the past, I advised my clients to hire a pest control company to inspect the property in addition to the structural inspection of the home. As you will see in the pictures below, not only did the exterminator find carpenter ants inside the walls of the home, but they also found wasps nests hidden in the electrical panel, and what he said was, “the largest infestation of Box Elder bugs I have ever seen”.
Ultimately, the solution to the pests cost the seller about $500, but the fact that they had covered up the infiltration from the carpenter ants ended up costing them about $2,000 to have the drywall removed, replaced, and repainted as well as to inspect the structural integrity of the wall where the ants were entering the home.
Wasps
Carpenter Ants
Box Elder Bugs
Secret #3 - Unpermitted Additions and Structural Issues
Structural problems are most often hidden to the untrained eye…until something goes wrong or an accident occurs. Issues such as a sinking foundation, a partially sagging roof, or an abnormal number of cracks in the walls should all be pointed out by an inspector. I have seen issues where sellers will try to hide cracks in the walls with pictures and loose floorboards with rugs or furniture. This is one of the reasons you should always, always, always do a final walk through prior to closing.
Last year, I had a client who, after looking at a number of homes, opened the door into their dream home. They loved everything about the house including the extra-large family room that circled around into the kitchen. The flow was perfect, but I pointed out a seam in the ceiling that made me believe that this part of the home was remodeled. With that knowledge, we asked the inspector to make sure there were not any issues with load bearing walls. Sure enough, he found that the bearing wall was removed, and the trusses were floating over the family room area.
The seller did not disclose any additions being done on the property, however, when confronted, they quickly paid for a structural engineer to come to the home and write a report of the work that would need to be performed to bring the home back to code ($1200) and to pay for the new archway that would need to be installed after placing supporting beams in the ceiling ($4750).
Even though this story turned out well for my client, I cannot stress enough the necessity to do your due diligence and to even check county records to make sure that home additions have been permitted. I wrote an article about the need for permits that you can read here: "I Own My Home, Why Do I need Permits for Improvements?"
Secret #4 – Aging Appliances and Mechanical Systems
Although a home inspector will test appliances, HVAC, and other systems within the home, the typical seller cover-up for these issues is three simple words, “I don’t know”. The answer will be the same for any of these questions:
How old are the appliances?
When was the last time the air conditioner and heater were serviced?
Are there issues with the water heater?
They will always come back with, “I don’t know”.
As a buyer, you need to be prepared that one of these systems could fail within the first year or two in your home. One way to overcome this concern in the short term is to ask the seller to pay for a one-year home warranty that will repair or replace appliances, water heaters, HVAC (all depending on the policy purchased) to help you gain peace of mind.
Although there are multiple examples of clients who have benefited from the home warranty, last year I had a client who purchased a home that was only 2 years old. The appliances all checked out during the inspection, and my clients did not feel they would need a home warranty. I advised them that it is just an added peace of mind that they should consider. Thankfully, I negotiated so that the seller would purchase a $500 policy for my clients. Almost 3 months from the day that they moved into the home, the microwave stopped working and two days later, the dishwasher began leaking onto the hardwood floor. My clients called me first and I immediately had a conference call with them and the home warranty company. There was a service repair person there the next day – the dishwasher was repaired, and, in the end, the home warranty covered the purchase and installation of a new microwave. In this case, the sellers did not know about the issues with the appliances, but my clients were so happy that they had this policy.
Secret #5 – Traffic and Noise
When buyers are searching for a home, I always make sure to point out potential busy streets and noise from trains, air traffic, vehicle traffic, commercial complexes, etc. Sometimes buyers will see a home online and begin picturing themselves in that home and begin to rationalize away the potential negatives that surround the property. Sellers don’t have an obligation to disclose noise to buyers – so this can be quite tricky to discover.
I had a client who loved a home that I presented to them. I attempted several times to show the home, but the buyer would only schedule the property between 1:00 pm and 3:00 pm in the afternoon. Although it was inconvenient for my clients, we finally were able to see the home and made an offer that was accepted. During the due diligence period, I attended the home inspection that began at 4:00 pm in the afternoon. Even though we had not crossed train tracks to arrive at the home, there was obviously a direct sound corridor or interdimensional wormhole that lead from the tracks to their family room because if you were to sit on the couch and gaze out the window as the train passed by, it sounded like you could be standing directly on top of the tracks. The inspector turned to me and said through a chuckle, “Well, that may be an issue”. I immediately got on the phone with my clients and had them meet me at the home, where within the hour there was another train that passed by. Needless to say, my clients cancelled their contract to purchase that home.
Secret #6 – Changes to Local School Boundaries
This is a tough situation because the choice of a school could determine whether a buyer chooses to see a home or not. Even more, given the price of a particular neighborhood, a buyer could decide on a more affordable home that still aligns with a more highly rated school. A change in the school’s zoning could be a major problem that a home seller tries to keep secret and it can obviously chase away interested buyers.
My recommendation if you are looking to buy is to not only take the time to research and call the school district prior to the end of your due diligence deadline, but to also knock doors around the neighborhood and ask questions – the neighbors will usually be more than happy to talk about anything going on!
Secret #7 – Problematic Neighbors
More than once I have sat down with a client to discuss the sale of their home and asked, “What makes now the right time to sell your home?” only to hear them reply, “We hate our neighbors”.
This may make you laugh, but a seller is not required to disclose their relationship with neighbors, nor should they. This reiterates why you need to spend time knocking doors and introducing yourself to neighbors as you prepare to purchase your new home.
Secret #8 – Disappearing Views
I will set the stage… you have fallen in love with the home of your dreams. You can envision your family growing up and bringing their kids back to see you as you grow older. The view from the backyard is out of a picture book with towering snow topped mountains and fresh air. There is even a field behind the property, which according to the seller’s agent, “that property has been owned by the same family for over 50 years and they have no intention of selling.”
Not knowing what is happening in the neighborhood or taking what someone says at face value can cost you dearly over time. Undoubtedly, over the years, the property behind the home will exchange hands or be developed. When purchasing a property, you need to anticipate that land use can change, and your views could disappear. As part of your due diligence, you need to seek out ownership records and investigate what the zoning and future plans for that land will be. Only after that work is done should you make a decision – especially if you are basing that decision on the views out your back yard.
Closing Thoughts
Finally, the main points you should take from this article are first, if you are a seller, disclose everything because covering up issues will most likely cost you more in the end. Second, if you are a buyer, then you should always hire a professional Realtor who has the experience to look beyond the emotions of your purchase and who will dive deep into the home to make sure you are protected – this can save you thousands of dollars and the pain and heartache of problems that you may be left with if the seller is able to hide the secrets of the home.
If you are looking to buy or sell your home in Utah County, Salt Lake County, Heber City or Midway, please reach out to me with any questions at (801) 885-2558 or by email at brandonrwood19@gmail.com.