Dealing with “condition issues” when selling your home

Reader Question: My garage floods due to driveway runoff during heavy rains. I am getting ready to put the house on the market as I am relocating to a different state. Do I need to disclose this as a drainage issue on my seller’s disclosure? Thanks. Brad W.

Monty’s Answer: Hello Brad, and thanks for your question. The law requires sellers to disclose defects or conditions that negatively effect value, affect the health of occupants or that if not repaired, removed or replaced would significantly shorten or adversely affect the expected average life of the premises.

It is the right step

As a seller, it is a smart idea to disclose even if the law did not require it. Doing so may eliminate the cost and likelihood of a future lawsuit or small claims judgment. Not disclosing the issue carries a high probability that whoever buys the property will become aware of it, and when they do, a neighbor will make an unwitting comment like “Oh, I thought they took care of that problem. He used to be hauling wet boxes out of the garage every week.” People have a tendency to become upset when they come to believe they have not been treated fairly.

Make the sale easy

Every state has different seller condition requirements. If it has been correctly and permanently repaired, it may not be a requirement to report a problem that no longer exists. Here is a quick test: If a buyer has two homes they like that are identical, except home “A” has water rushing into the garage during heavy rains and home “B” has no issues. Which property will they buy? Taking this test helps see the benefit of repair clearly. As a follow-up question, ask “How much would the seller of home “A” have to reduce the price to swing the buyer back over their way? The typical buyer does not want to buy a problem, unless there is a financial incentive.

You could save money

There are other positives in fixing the problem before placing the home on the market. By fixing it first, there is no already nervous homebuyer looking over your shoulder. Also, making the repair after a price is established for the home comes out of your pocket. When making the repair prior to a sale, the cost can often be factored into the asking price. Buyers have a tendency to overestimate the cost of repairs; so taking these potential issues out of the home selling equation are a plus.

Pay the buyer to do it

A common problem in real estate transactions is a buyer that complains because the seller’s repair work is shoddy. A similar complaint is “They found the cheapest material.” If money is tight, consider negotiating with the buyer to accept a reduced price for the cost of repairs. When the buyer completes, or supervises the repairs, it is difficult to have complaints.

A seller will often overlook the correct repair for an inexpensive method. Identify several contractor or concrete contractor “experts” and solicit 3 written proposals to fix the problem permanently. Make certain they include a “not to exceed” price. They each may have a different solution, and sometimes the least expensive one makes the most sense. If a seller cannot come up with the cash to make the necessary repairs, having 3 estimates to share with a buyer is a positive.

Make lemons into lemonade

In some cases, fixing the issue can also add a new selling point to the equation. For example, perhaps the best solution is to remove the concrete driveway, lower the grade 3 inches and re-pour the driveway. When driveways are cracked and un-even, fixing the water problem creates a home improvement, as well. If a below-grade cap gutter cut into the concrete outside the garage door is the best solution, it may also serve as a floor drain for the garage.

Most water related issues could be repaired. The main exception is when the home is located in a flood zone.