Here’s the good news:
To say that the residential real estate market in California has been hot is like saying the Grand Canyon is a nice little hole in the ground. With high demand and low inventory, this seller’s market has resulted in double digit year-over-year appreciation. It has also resulted in multiple over-asking-price offers, and typical days-on-market of less than 2 weeks. If you’re a seller, these are really good times.
Here’s the bad news:
Unfortunately, we have also seen a significant uptick in nondisclosure claims. We believe there’s a direct relationship between the current market and the increase in these claims. Here’s a fact pattern that we’ve now seen on many occasions: Homebuyers, eager to get into the market, have been outbid on several other properties. The buyers then decide they’re not going to let the next property get away. They’ve received a seller’s disclosure package on what they hope will be their dream home, and the package comes with a short fuse for offers to be received and for escrow to close. The buyers then make an over-asking price offer with a short close. And, relying entirely on the disclosure package (sometimes without fully understanding it or even reviewing it in detail, and sometimes without even seeing the property in person), they waive all contingencies with their offer. The offer is accepted, and the buyers put a 3% initial deposit into escrow.
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