What are the rules when you are selling a house you’ve never owned? The disclosure forms are always a bit tricky for my clients in this regard. In normal circumstances the seller who is transferring the property would be required to provide all prospective buyers with any facts materially affecting the value and desirability of the property. Since the previous resident is deceased there is no way that those disclosures can be made.
1. As Is Addendum
The seller in the case of inherited property could be the personal representative, trustee, or the heirs of the decedent. If you are selling a property “as is” then I recommend attaching an In Its Present Condition Addendum. This does not relieve the seller of the obligation to disclose material facts which the seller has actual knowledge so I would still suggest filling out the Seller’s Disclosure concerning major defects, however it puts the buyer on notice that the property is being sold in its present condition, which includes all latent and patent defects and conditions.
2. Attach reports
You should also attach any recent engineer reports or invoices for work recently done. My goal is to prevent any passive fraud on behalf of the seller. Passive fraud is intentionally not disclosing a material defect when they know or should have known of the issue.
3. Insist Buyer Get Inspection
I would advise you to insist that the buyer engage the services of a professional home inspector. The inspector will check the major components including electrical, mechanical, foundation, grading and roof. I would also advise requesting a pest inspection.
4. Understand Probate Court Approval Process
If the house is going through the probate court, that sale is different because it will be under the jurisdiction of the probate court. In a probate sale the terms and conditions of a purchase are generally subject to court approval.
5. Beware of Probate Court Filing Requirements
In Kansas and Missouri, the court will not approve the sale unless the sale price is at least 75% of the appraised value (outside of extenuating circumstances). The notice of sale typically must be filed with the court within 10 days of the contract date, which coincidentally is the same amount of time for inspections to be completed. This means that if the buyer is not accepting the house as is, there is not enough time for negotiations after the inspection period so no concessions can be made on the price once it’s sent to the court for approval. This is huge because if the buyer is asking for work to be performed by the seller, the seller must pay for it out of pocket instead of reducing the price of the home – because it’s already gone to the court for approval with the originally agreed upon price.
This is why a realtor experienced in inherited property and probate is necessary to ensure your interests are protected. Please contact AC360 Realty 816-591-3908 MO or 913-440-4238 KS for additional questions.