Using a Real Estate Disclosure Form

Pat was buying a house. Everything looked great: the building was in good shape, the land around it was well-landscaped and –maintained, and the detached garage and children's playhouse were a dream. She couldn't figure out why it was going for such a remarkably low price; she'd checked to be sure the title was clear, there was no bad history behind the house, and the owner assured her that everything was in good order.

She bought the house. But then the worst happened.

The plumbing, she found, was inadequate for her family. The water stopped and started, sometimes it was brownish, and when she had it tested the lead content was much higher than it should be.

Lead piping, the plumber explained. It happens sometimes in houses built in the 1950s. He arranged a date and time to come over to replace everything, and Pat arranged for her family to stay elsewhere. How, she wondered, was she supposed to pay for this?

But it could and did get worse. The plumber started drilling, then stopped. Asbestos, he explained, had been used extensively in the house's construction – again, a problem common to houses built during the 1950s. An asbestos specialist would have to be brought in to remove all the asbestos from the piping areas, then the plumbing could be done, and after that, a contractor would have to come in to repair damage where the asbestos had been removed. Moreover, everything in the house needed to be taken out or slipcovered during asbestos removal.

How much would it cost? Pat found, when she did the math, that the ultimate cost was half what she had paid for the house.

The old homeowner denied knowledge of the problem, though Pat knew that the water must have been brown when he was there. And then the plumber confirmed that the homeowner had contacted another plumber he knew. Only after finding the extent of the problem had he decided to sell.

Pat's recourse? None. She had not asked the seller to sign a real estate disclosure form, stating that he had told her everything he knew about the property.

Protect yourself from this situation. Download a real estate disclosure form. If you every find yourself in Pat's position, it can help you recoup your expenses, and even void out the sale of the home in certain extreme cases.