Property under contract. Seller lying on disclosures, what should we do?

Question

My wife and I got a property under contract a few days ago. We just got a copy of the seller disclosures and know with certainty that the seller is lying about 2 things. After we looked at the property, we got a copy of the signed lease agreement for the current tenants that allows us to give them a 30 day notice to vacate upon closing. HOWEVER, the seller marked that the home was not being used as a rental. Lie number 1.

When we lined up our insurance on the property our agent informed us about a claim made for a little more than $10,000 in Sept. 2021 because of water damage. The Seller denied that any claims were ever made on the property.

Now we're getting an inspection tomorrow that will tell us a lot about the place. But given the insurance claim she's lying about we're not sure what recourse we might have.

We're working on getting more information on the insurance claim, like what was it for? Who did the repairs? etc.

So ultimately, having proof that she's lying about $10,000+ worth of water damage what could that mean legally? Could that be grounds for a lawsuit in the future? We'll probably have our realtor send theirs a message asking for honesty. Do we just inform them that we know about the insurance claim and hope for the best?

We'll more than likely be asking for a lower purchase price at this point, but if she denies lowering the price should we just close and take legal recourse against her if the damage is still present/ unfixed? It'll make a good cash flowing property, but the seller clearly can't be trusted.

Kimi Proffer · Answer

I would be cautious, especially if it's regarding water damage. She definitely should have reported this on the disclosures, if it is true. Sellers can cover up a lot, and inspectors don't always find what lies beneath. Is legal action really worth it? I made a huge mistake with wanting a house so bad that I overlooked issues. Inspections didn't reveal anything, and now looking back, I should have never trusted the sellers. I wouldn't close on a deal that I think could end in legal action. Go through all the possibilities, and decide if it's worth it. Good luck!

Lydia S. · Answer

You have knowledge of these points and as a buyer need to continue with your due diligence regardless of what the seller is saying.
You can object to the seller disclosure and ask for more information based upon your findings, then decide whether you want to move forward buying the property.

Always take what the seller is saying with a grain of salt, in every transaction. It’s up to you to investigate and inspect anything and everything that concerns you.

Katelin Burke · Answer

I wouldn't go into a deal with the intention of later getting into a lawsuit. I would save yourself the headache and find another property.

Bill B. · Answer

You have a confusing post you say she “lied about it not being a rental” and that she gave you a copy of the lease are you saying she’s the worst liar in history or she clicked on the wrong box? A far cry from liar I’d be more worried she’s being represented by a very bad realtor who isn’t filling the form out with her

Your “recourse” is to walk away from the deal. You know about it before buying.
We can agree that making a claim on a $10,000 loss was a mistake but it was her’s not yours any claim that small shoulda been made out of pocket

It sounds like you’re assuming you hired a bad inspector that won’t find water damage that the seller who doesn’t live there should have found? Obviously if it was an insurance claim the seller wouldn’t cut corners it wouldn’t save them any money. Heck, they shouldn’t have even been involved. It should have been between the contractor and the insurance company. You could try suing your inspector but I don’t think anyone has ever won that battle.

Ps. I wouldn’t expect an inspection to “tell you a lot about the place…” I don’t think I’ve ever learned anything that wasn’t visible to a layman walking the property. You’ll get a lot of “consult an expert” on anything that could be serious.

Property under contract. Seller lying on disclosures, what should we do?

Property under contract. Seller lying on disclosures, what should we do?

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