What Does A Realtor For A Bank Owned Property Have To Disclose?

Bank foreclosure sales are the predominant venue for most home buyers today when they begin their home search. Bank owned homes tend to be priced below market value and there is no emotional attachment to the house for the bank. But there are a few things to be aware of when you are looking to purchase a bank owned home. One is property disclosure in North Carolina. Generally all sellers will fill out the form honestly with what they know about the house and the latest dates for replacement of anything they are aware of. Because a bank has never actually lived in the house they are exempt from any property disclosure. Some people argue, so what? Well, the fact is the bank has sent someone to look at the house and give an evaluation of what they see to be wrong with the house. In some cases they will even get quotes on doing some repairs to the house or cosmetic work if they feel it will enhance the value of the house or help in the sale of the house. Then they will make a decision as to whether to do the repair work or not. What if the bank is trying to fix a problem in the house? The bank can fix it and not say anything just as a homeowner can as well; but what about the Realtor? Do they have an obligation to say anything? Talking to realtors who represent banks on properties in the Charlotte, NC. Area the consensus is NO....They are an extension of the bank and if the bank does not want to tell they do not have to tell (unless it is a material fact about the property). Why would you not want to tell someone about a repair you did? Or inform them that the property may have hidden damage? I have shown and sold my share of bank owned properties. Some have been great deals and some have had issues. Most I would say you could see what the damage was...but in some cases not until the home inspection did we realize the extent of damage... Yet, when I go to cancel a transaction the Realtor said I knew but it is no big deal... Well what may not be a "big deal" to you may be to a single mother of two children looking for her first home. In my humble opinion (and I am only one person and am not speaking for anyone else here) I believe if a Realtor is aware there is an issue with a house or fixed an issue with the house they should inform the buyer's agent before the final negotiations are done. As a Realtor; it is upsetting to negotiate out a transaction with a bank and then do a home inspection to find issues with the house that were already known and not disclosed. Why make the buyer pay for a home inspection and waste everyone time if there was an issue with the house you as a Realtor were aware of and elected not to tell? Buying bank owned homes can be a good deal…but only if you understand the rules and what a bank will or will not tell you…… Dave diCecco Realtor/Broker www.davedicecco.com