ST. LOUIS, MO (KMOX) - Buyers are so desperate to win bids for properties that some are giving up important legal rights.
Imagine you won the bidding war to get your foot in the door of a home you fell in love with. But months later you discover major defects in the property.
"It's a really terrible place to be, and it takes a long time to resolve something like that, and it's very expensive, so you're looking at a real burden there if it happens to you," says Attorney Ed McCarthy with McCarthy and Allen in Glen Carbon, Ill.
In Illinois, sellers are required to disclose issues with a property to potential buyers. McCarthy says that doesn't mean it's okay for buyers to waive an inspection, "waiving the inspection is a real concern." It's a risk and may leave you with little legal recourse if there are problems with the property.
It's also important to know what's in a potential real estate contract. McCarthy gives an example of the standard contract in the Metro East... "that contract says that if you waive the inspection, you're buying it 'As Is.'"
General Counsel for Missouri Realtors, Steve Graham tells KMOX, while Missouri does not have a statutory disclosure form for sellers like Illinois, the majority of contracts do include comprehensive defect disclosures. As part of those forms, sellers agree to update buyers if new issues come to light prior to closing. Those agreements also include explanations of why a seller may know very little about the property -- if, for example, they have not actually lived at the residence.
A consideration for sellers is the escalation clause in a real estate contract. That's where a buyer agrees to increase their offer up to a certain amount, if another potential buyer outbids their first offer.
"The seller wants to have assurances that the buyer can buy the property even if that purchase price is greater than the appraisal," Graham says. "So the seller is going to want some kind of not just a promise to do, but some kind of proof that they can do it."
In some cases this spring, appraisals have not kept up with current market prices, because comparable property sales happened before the uptick.
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