As a Minnesota REALTOR®, my real estate clients, both buyers
and sellers, are sometimes confused by inspections and disclosure requirements
in the Twin Cities and surrounding suburbs. Sellers want to know what they should
disclose and if they are required to have an inspection done first. While there
are a handful of communities in the 7 county Minneapolis/St Paul metro that do
require a point of sale home inspection be completed prior to listing a home
for sale, most do not. Buyers often wonder if they should be receiving a
written disclosure or if the seller will provide an inspection report.
Just the other day I was on the phone with a client who is
getting his house ready to put on the market. He was lamenting that he had call
the truth in housing (TIH) inspector too early. He was in the middle of several
small repair projects when the inspector visited so he received a number of ratings
that were below safety standards. The inspector cannot assume a homeowner will
actually finish all of the projects in progress. Lesson learned here: Don’t
call the inspector until all repairs are complete!
Another first-time selling couple asked about having their
home pre-inspected. They live in a community that does not require a point of
sale TIH. Their beautiful home was full of many updates and was obviously well
maintained. As they filled out their seller’s disclosure, they brought up the
subject of a pre-inspection. A friend of theirs had recently sold a home and
had done this. When the offers came in, the buyers on their friends’ home opted
to forego the inspection, choosing to just read the report. My clients were
wondering if this was a common practice and if a pre-inspection was recommended
and/or required.
In Minnesota, there is no Truth-In-Housing inspection
requirement to sell your home at the state or county level. There are however a
number of communities in the Twin Cities that do require a pre-inspection
report. These go by many names: Truth-in-Sale of Housing Disclosure, Time-of
Sale, Time-of-Sale Code Compliance, Dwelling Maintenance and Occupancy Code
Compliance, Housing Code Compliance Inspection or Housing Maintenance Code
Inspection. Some of these inspections are done by inspectors that are city
employees while other communities have licensed private inspectors to perform
the inspection of the home. But in many cases, will be up to the home owner
select a contractor to perform the inspection prior to listing the home for
sale. It is very important to contact the city to make sure the proper
procedure is followed when selling a home to avoid fines.
Private Inspectors (Selected by
Homeowner)
City Inspectors
Can I still have my home
pre-inspected if my community does not have a truth-in-sale requirement?
Absolutely! Having you property
pre-inspected and an inspection report available to potential buyers can speed
up the home selling process. Some buyers will choose to review the report and
not have another inspection completed making the offer not-contingent on an
inspection. Other buyers will choose to have the inspector who did the
pre-inspection come out to the home to explain the details in the report. This
is often completed for a reduced fee to the buyer since the work has been
completed and it is not as time consuming to the inspector. However a
pre-inspection does not guarantee that the buyer will not opt to hire their own
independent inspector to give what they will believe to be an “unbiased”
assessment.
If I give an Inspection or
Truth-In-Housing Report, do I have to complete a seller's disclosure?
If you have lived in the home, I
would recommend that you complete the disclosure to the best of your knowledge.
A seller must disclose any material facts that you know about the home.
However, in the case of an estate, flipped home or rental property where the
owner has not lived in the home for some time if ever, the owner will have
limited information regarding the property. In this case, an inspector's report
can be offered in lieu of the completed disclosure to meet the state disclosure
requirement. A buyer may also agree to waive their right to the required
seller’s disclosure. In either of these cases, this will not exempt a seller
from any local or federal statutes (i.e. water well disclosure and lead based
paint are examples).
What if it is a bank owned home?
Does the bank have to provide a seller’s disclosure on a foreclosure?
Minnesota state law does not have
different rules for a bank or other financial entity. They must disclose
material facts on a seller’s disclosure, offer an inspection in lieu of
foreclosure or have the buyer agree to waive their rights to a disclosure.
More Disclosure Questions?If
you are buying, selling or relocating to Minnesota and need help from a
professional REALTOR®, give me, Teri Eckholm of Boardman Realty, a
call or visit my website for a FREE Home Buyer Success Guide or FREE Home Value Report. I specialize in
acreage and lakeshore properties in the north and east Twin Cities
metro area including Ham Lake, Lino Lakes and all communities in the
Forest Lake School District! Serving Anoka, Chisago, Ramsey and
Washington Counties in Minnesota.
Copyright 2014 www.terieckholm.com
