Sale by Owner or Through Real Estate Agency. The great majority of homes are sold through a real estate agency. Typically, you will pay a commission of 7% of the sales price for the services of a real estate agency. You will sign a “listing agreement” which will set forth among other things, the amount of the commission and the length of the listing. You should shop around for a realtor before deciding on who you want to sell your home. Since the listing agreement is a binding contract, it is important that you have your attorney review the document before signing.

You Must Disclose Hidden Defects. In many states, a seller can be held liable for damages including possible rescission of the transaction if they fail to disclose a material defect known to them and not reasonably discoverable by the purchaser. (This can occur for instance when the seller actively conceals or otherwise fails to disclose to a buyer that the basement leaks). In some states sellers must now provide a written “Sellers Disclosure Statement” before the purchase agreement is signed which sets forth, to the seller’s good faith knowledge, the condition of various aspects of the home.

Sellers Are Liable for Innocent Misrepresentations. A few states (including Michigan) follows the minority rule which holds a seller liable for a representation relied upon by a buyer even if the seller did not know that the representation was false.

Category: Buying/Selling Real Estate
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