A buyer who made an offer on a house has found out from her engineer that the attic has structural damage due to an undisclosed fire. The seller, of course, wants to take short cuts to fix the problem.

Hi, I have a question for you. We put a bid in on a house and our offer was accepted. We had an engineer come in and do an inspection and in the attic he found that there had been a fire. The ridge beam, rafters and other beams were all charred. The homeowner had someone come in and just place ply wood over the burnt up areas. The engineer told us in order to fix this the roof would have to be torn off and the beams and rafters replaced. We then had a contractor come in and give us an estimate of how much it would cost to repair this damage.

The seller then got an estimate as well and of course they were totally different. The house is not structurally sound. Is the seller legally responsible for fixing this or giving us credit toward the purchase? Also do they have to remove the beams or can they get away with just supporting them? Thanks for your help, Francesca

Realty Times responds:

First, the seller is responsible for honest disclosures about the integrity of the home, within the scope of his knowledge. It's highly unlikely that he didn't know about the fire, so let's assume that you're negotiating with a dishonest seller who is likely to also be dishonest in his resolution of the burned attic problem.

Second, the seller demonstrated that he prefers to a quick-fix to actually fixing the problem. It's reasonable to assume that his solution will be a quick fix, too.

You may not realize it, but your seller may have signaled his intentions to unload a structurally unsound house on you from the beginning.

How do we know? Easy. You haven't mentioned that either you or the seller are represented by a Realtor.

Some sellers try to sell their homes themselves because they don't want their feet held to the responsibility fire. A seller working with a Realtor is going to be held to a higher standard of disclosure, marketing and presentation of the home, and fair treatment of the buyer, because that's in the Realtors' code of ethics.

Other sellers don't use a Realtor simply to avoid paying commission. Some buyers like to buy FSBO homes because they think they're saving the commission, too, but the reality is that even though the commission comes out of the seller's proceeds, it's the buyer who's paying because she brings the money to the table that covers the commission.

Some real estate professionals vehemently argue that isn't true, that homes sell only for market value. But that doesn't explain where the money goes. If the commission is built into the sales price, then the market value of a home sold by a Realtor is higher by that percentage. About eighty-five percent of homes sold in the U.S. are sold through Realtors, so they have a huge impact on "market value."

Now if you bought a home directly from a seller at market value, you didn't get your money's worth. You didn't get the representation or advice that you paid the seller for.

A seller's agent would have insisted that the seller come clean and disclose the structural damage caused by the fire. A Realtor negotiating on your behalf would probably have insisted that you see the attic before you ever made an offer. You wouldn't have been out the money for the inspection or for the deposit, because you would have either walked away from this house, or made a much lower offer.

One reason why it's better to have professionals involved is that they have valuable experience as well as instinct and could head off these kinds of problems from the start. They also share liability in any transaction and are therefore motivated to make certain that state and federal laws have been followed closely.

Disclosure laws are mandatory, which means that the seller must tell the truth, or you could come back at him and his agent for fraud.

To answer your question, the seller is only responsible for upholding the terms of your written contract. If you change the terms, then a new contract is in play that is only enforceable once you both agree to the new terms.

It's incumbent upon you to write new terms -- either ask for a reduction in price for release of liability on the attic damage, or ask that the seller perform the repairs to your satisfaction.

It's up to you if you want to continue dealing with this guy, but if you decide to follow through and buy the house, make sure the damage is fixed the right way -- to pass inspection and building codes.

Published: July 27, 2007

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.