The grey areas in disclosure laws for sellers

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It should come as no surprise that homeowners are often tempted to stretch the truth when they’re trying to sell a property that’s already been sitting on the market for several months. But buyers beware: the troubled housing market is exacerbating the prevalence of little white lies like overstating a property’s size or understating taxes and utility bills, and many state disclosure laws don’t apply to bank-owned homes, which represent a burgeoning share of the inventory. In more than 30 states, sellers are required by law to disclose potential problems with their homes like leaky roofs, the presence of radon gas, among other nuisances, but a grey area exists in issues that the seller might not know about, or chooses to forget. Common fibs collected by the Wall Street Journal from real estate agents and regulators deal with property dimensions, pest problems, floods, taxes, and noise. For buyers of new homes during the housing boom, many were also duped by builders’ promises of amenities like clubhouses and golf courses that never came to fruition after the money ran out. [WSJ]