What Lies Beneath…

What you don’t want to find out after you buy!iceberg

Recently I had a client inquire about a property in probate, which means the property is currently being processed, to be sold as directed by someone’s Last Will and Testament. This client asked a very understandable question: “Did the owner pass away at the property?” I looked into it for them and sure enough, the former owner had died in the house!

In real estate language a property may have what is known as a latent defect. In simple terms this means problem/s that are not readily visible or are hidden from a reasonable inspection. An example of this could be an old oil tank buried in the yard or a lack of building permits. As well, there is also another term called material defect. This would be a significant shortcoming to the property making it potentially dangerous, dangerous or uninhabitable. Some examples of this are wiring installed incorrectly, or a faulty foundation causing significant cracks, and then covered over by new drywall.

There can also be stigmatized properties. This is where an event in or around the property will have an effect on the property. In many cases these types of issues can affect the value of the property depending on the person buying the home and their particular belief system but may not be known from a physical inspection of the property. Here are some examples of this: As already mentioned, death in the home (which could simply be from old age or as drastic as suicide or murder); a convicted felon or pedophile living next door; or the property was previously used for criminal activity (such as a grow op, drug lab or brothel).

In the world of real estate there are issues from time to time popping up that are not openly visible by looking at the property. In my client’s case, they instinctively suspected something and investigated further. But, it could have been missed. In the province of BC, sellers and selling realtors are required to disclose what is known about a property for sale. As a buyer, don’t be afraid to ask lots of questions. It is important to have a good realtor on your side to protect you through a strong contract and know what questions to ask and where to look for answers.

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