Property Sellers Who Are Dishonest
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Property appraising can be a treacherous minefield of disinformation if you happen across the wrong type of seller.
In most instances, the role we play should be straightforward. We’re a link in the chain, a functional part of the house buying process which is essential and relatively straightforward. We enter a property, value that property and facilitate lending based on our valuation.
However, an issue can arise when the property seller wants to mask certain problems or prevent a lower, but accurate, valuation of their house. They can look to deceive and cover-up issues that may arise, meaning we must be extra vigilant when appraising.
Here are just a few of the things a seller may do to mask the true value of their property.
One of the common methods by which a seller may look to deceive an appraiser is in disputes with current neighbors. The Seattle Times reports how a feud with someone living next to a property can severely impact the valuation.
It isn’t an easy problem to navigate either, short of knocking on the neighbor’s door and asking them their opinion. Try to look for obvious signs, coy replies when asked about the situation or other signs of a dispute.
Plumbing and heating are an intrinsic and intricate part of a home, and must be serviced correctly. Sellers may want to hide small symptoms that hint at wider problems, so look for things like fresh paint over possible areas that have experienced a leak, for instance.
When it comes to utilities, you may not find out the answers until you ask questions yourself or conduct your own inspection. Property sellers could be dishonest about plumbing issues, which could lead to unwanted leaks, dampness, mold growth, and structural damage that will affect the property’s value. And this happens all over the world.
This was the case for a British woman in Swindon named Lucy Mitchell, who found leaks all over the inside and outside of her home, which suffered from constant dampness, only after she moved in. Her drains and toilets were clogged with cement, and her heating was not functioning as it should. This is why UK-based plumbing experts HomeServe recommend ensuring that a home’s pipes and drainage are all insured to avoid similar or worse damage. US-based appraisers should also be on the lookout for these problems, as leaks can be an expensive defect that dishonest property sellers this side of the Atlantic might also try to conceal if you don’t watch out. Try asking a seller if they have any home coverage plans, or if they recently had their home’s plumbing serviced.
Pest Problems (current or historic)
Infestation can negatively impact the value of a home, even if it is a historic one. US News explains how pests can get into a home at any time, something that is an ongoing issue for homeowners all over the world.
For instance, four Irish roommates in Galway found out that they had a mouse issue that they had not been aware of when they moved in. Upon complaining, their landlord seemed to be avoiding pest control. The issue was not caused by their own negligence in keeping their home clean, but by the gaps in sewers and pipes which were undisclosed by the seller. As an appraiser, you must be on the lookout for signs that a property has had infestation issues. If they’ve been dealt with, a seller may simply say ‘no problems’ when asked if they’ve had an infestation in the past, but that would not be the full truth.
Meanwhile, Termites Blog discusses how termite damage causes $5 million worth of damage to American homes every year and whilst it may not be a reason to put off a purchase, it is a problem that can affect a house’s value.
Some appraisers may well check planning applications as a matter of course, but often a seller may be looking to move because of a planned road, flight path or even a neighbor’s extension. These are all issues that can impact a home’s value and that may be masked by a homeowner.
Aside from any checks you might usually make, it’s worth probing the seller for any reasons they might be selling. It could be something as obscure as a property changing from residential to business on their street, but it is still a factor in appraising a house’s value.
If you found this article useful, take a look at ‘What Skills Do I Need Now?’ for tips on how to use new technologies in becoming better appraisers.