By Lorie Garland, OAR Assistant Vice President of Legal Services
Q: What affect does an “as is” clause in a purchase contract have on a seller’s duty to disclose property defects?
A: Generally, a seller has the duty to disclose known latent defects. These are defects that the seller are aware of and are not easily discoverable upon a reasonable inspection of the property. An “as is” clause eliminates a seller’s duty to disclose material latent defects. This clause would protect the seller in a lawsuit by the buyer for damages incurred by the seller’s failure to disclose a defect.
An “as is” clause, however, will not prevent the seller from being liable if the seller is found to have engaged in “active fraud.” “Active fraud” requires an act by the seller such as concealment of a defect or misrepresentation of a condition of the property. An example would be if the seller is aware of a foundation problem and when questioned by the buyer states that there is no foundation problem or conceals the foundation problem with boxes so that the defect cannot be discovered by a reasonable inspection.
It is imperative that buyers and sellers review the terms of the purchase contract. When a buyer contractually agrees to accept a property “as is,” the seller is relieved of the duty to disclose and will not be liable to the buyer for nondisclosure of a defect unless it can be shown the seller engaged in fraudulent concealment, fraudulent inducement or fraudulent misrepresentation. REALTORS should keep in mind that all contract terms are negotiable and if a client questions the significance of an “as is” clause or, for that matter, any term of the purchase contract, the client should be referred to their personal attorney.
Click here to access OAR’s Disclosure Issues White Paper for additional information on “as is” clauses and fraud.
By Marilou Butcher Roth
No I do not mean your home or your office, or even your car! What I am talking about today is cleaning up our conversations, eliminating assumptions and guesswork. I cannot tell you how often I hear clients telling their tales of woe about what someone said or how they behaved in a manner that was interpreted as “bad.” When it is all broken down, it is clear that with minimal communication regarding expectations, or making clear agreements, the entire problem would have been averted.
We all find ourselves in this position at times — finding your way to better communication takes practice! This is something that can be work related or apply to our closer relationships. We interpret what we see and what we think we hear, that is normal. Then, we tend to make up our own story about what we see or hear without checking it out. So…check it out! Do not assume that your interpretation is correct! The more I practice this, the better my conversations and relationships go.
Its easy really — whenever you find yourself assuming that someone is thinking a certain way or will behave in a certain way (that involves you), check it out! If you assume that someone will plan to meet you at a certain time but you haven’t clarified the assumption, you may be not so pleasantly surprised. Then you get mad at the person, who never planned on showing up at that time to begin with! And so it begins…
So this week, clarify, ask questions, make sure you are on the same page and I promise life will be easier!
Marilou Butcher Roth is the owner of The MBR Group, a coaching and training company working primarily with REALTORS who have a desire to work and live from a more inspired place. She is also the Broker/Owner of Group REALTORS in Cincinnati and serves as chair of the OAR Communications Committee. Feel free to contact Marilou to see if coaching is right for you: Marilou@mbr-group.com.
By Bob Goldberg, Senior Vice President, National Association of REALTORS
Buying health insurance is often a daunting task leaving individuals and small businesses feeling lost and confused. This confusion has been intensified, now that the Affordable Care Act mandates everyone has to have insurance in 2014. Members have turned to the National Association of REALTORS looking for help and guidance, and wondering where to begin and what NAR has to offer.
I’m pleased to announce a new health care awareness initiative driven by NAR. This initiative brings information and knowledge to members in an easy and accessible way. A new health insurance topic page has been created on REALTOR.org featuring:
- info graphics
- link to the Affordable Care Act website
- link to the REALTORS Insurance Marketplace, a REALTOR Benefits program supported by partner SASid (Smart and Simple Insurance Development)
Also, a live webinar will be presented on December 12 at 11:00am (CST). The webinar will provide an update on what’s happening in health insurance, responsibilities to comply with and options. It will also answer popular questions about the open-enrollment deadline and whether to use a private or public exchange. To register, simply click here.
Additionally, NAR has created an informative, one-page Fact Sheet outlining the health insurance awareness initiative and its benefits to members.
Congratulations to two Columbus commercial practitioners, James H. Coridan and Greg Hrabcak, for their inclusion in the National Association of REALTORS 2013 National Commercial Awards.
Coridan (right) was honored as the Ohio Association of REALTORS’ 2013 REALTOR of the Year in September. He is associated with Keller Williams Excel Realty and holds NAR’s SIOR (Society of Industrial and Office REALTORS) designation.
Hrabcak (far right) was elected as OAR’s 2014 President-elect during the organization’s Annual Convention & Expo. He is associated with HER REALTORS and holds NAR’s CCIM (Certified Commercial Investment Member).
By Carl Horst
Look for existing home sales to remain steady across the country in 2014, with median prices posting a healthy 6 percent gain, according to Lawrence Yun, chief economist for the National Association of REALTORS.
The forecast for unchanged sales activity follows a 20 percent increase over the past two years. The median home price has posted an 18 percent cumulative increase during the same two-year span.
One concern for the market is “the inevitable rise in mortgage rates” that will hinder affordability, Yun noted. 30-year rates, which have been below 6 percent for five years, are expected to tick upward to 5.3 percent by year-end 2014.
Yun, who unveiled his forecast during the organization’s recent Annual Conference in early November, offered insights into what buyers will be looking for throughout 2014, including:
Rising interest in condominium and apartment living than existed in 2011. The preference for single-family detached remains the top choice (76 percent this year, a slight decline from the 80 percent mark in 2011). Condos and apartments saw an increase to 14 percent (from 8 percent) and single-family attached housing was favored by 6 percent (from 7 percent two years ago).
Privacy, walkability and schools are key in deciding where to live. Topping the list of most important factors was privacy from neighbors (with 86 percent of buyers saying it was very or somewhat important). Other top choices of buyers: sidewalks and places to take walks (80 percent); high-quality public schools (74 percent); being within an easy walk of other places and things in the community (69 percent); easy access to the highway (68 percent); living in a community with people at all stages of life — adults, families with children and older people (66 percent); an established community with older homes and mature trees (65 percent); being within a short commute to work (65 percent); public transportation within walking distance of the home (59 percent); and living in a place that’s away from it all (55 percent).