What Happens If a Buyer Finds Undisclosed Issues During a Home Inspection?

When you purchase a home, it might come as a surprise that certain issues might not be brought to your attention by the seller.

Proper disclosure from the seller is essential, but the reality is that sellers can't disclose things they don't know. The primary purpose of a home inspection is to uncover any potential issues that the seller might not be aware of.

Why Disclosure Matters

Homeowners are responsible for disclosing everything they know about their property, but they can't be held accountable for unknown issues.

This is precisely why it is crucial for buyers to have a professional home inspection. This inspection can help identify any potential issues that were not noticed before, such as the water heater problem that you and your wife faced.

Your contract should provide you with the right to request an inspection, and if you find significant issues during the inspection, you can potentially terminate the contract. However, merely finding a lack of awareness on the seller's part might not be enough to cancel the contract.

Can You Cancel the Contract?

While it's uncommon, you may cancel the contract if you find issues that were not disclosed and you have an inspection contingency in your contract. If you are within the allotted period for your inspection, you can proceed with canceling and receiving your escrow money back.

If the seller did not disclose a material deficiency, it could be grounds for cancellation. For instance, if the roof is caving in or the foundation is severely cracked, these are issues that could jeopardize the safety of the home.

However, even if there is no inspection contingency, a material deficiency could still lead to contract cancellation. It's important to understand the details of your contract and to seek legal advice if necessary.

Limited Buyer's Rights Without Inspection Contingency

Without an inspection contingency, your ability to cancel the contract becomes more limited. However, this doesn't mean you have no recourse at all. If the seller did not disclose a significant issue that could affect the home's value or safety, you may have grounds for cancellation.

For example, if the seller failed to disclose a noxious odor from a neighboring property, or disruptive flight patterns from a nearby airport, you might have grounds for cancellation. Some sellers might argue that these issues were not material. However, buyers often seek legal advice based on the specific circumstances of their case.

Preventative Measures and Professional Advice

Real estate agents often recommend that buyers conduct a full home inspection from a qualified, bonded, insured, and certified inspector. The inspection should cover all aspects of the home's condition, ensuring that you are aware of any potential issues before finalizing the purchase.

It's important to work with a buyer's agent who has a fiduciary duty to represent your best interests. This means they are committed to helping you navigate the complexities of the home buying process.

Additionally, sellers are required to disclose any material defects of which they are aware. The definition of a material defect can vary by state but generally includes conditions that impair the safety of the home. Common examples include cracked foundations, leaking roofs, and noxious odors.

However, even if a contract is not canceled, issues that were undisclosed can still lead to lawsuits. For instance, if the seller failed to disclose a noxious smell from a nearby property and later caused significant health problems for the buyer, the buyer might have a case for a lawsuit.

Conclusion

In summary, the key to protecting yourself as a buyer is to have a thorough home inspection, understand the terms of your contract, and have the support of a knowledgeable buyer's agent. This approach can help you avoid costly and time-consuming disputes and ensure that you are making an informed decision about your home purchase.

Always seek professional advice if you find any undisclosed issues during the inspection process. The home you purchase can be a major investment, and it's crucial to protect your rights as a buyer.