U r b a n T r e k k e r

This Week in Real Estate

I found this article in WSJ "As-Is Sales Can Raise Disclosure Questions" provides a very good advice for would-be sellers and buyers.

Here's the excerpt:

Question: We sold our house in August. The buyers bought it "as is" and didn't get a home inspection, although we did. Now, they claim that the backyard heavily puddles and doesn't have proper drainage. When we owned it, we noticed some small puddles during very heavy rains, but none that we considered significant. Hence, we didn't check off drainage problems on the disclosure form. Our home-inspection report noted that the backyard didn't have proper drainage. The new owners got a $15,000 bid for installing proper drainage and want us to pay for it. What are our legal responsibilities?

-- Name withheld by request, Los Angeles

Answer: Your responsibilities are unclear at this point, I'm sorry to report.

June Barlow, general counsel of the California Association of Realtors, says people frequently misunderstand what it means to sell a house on an "as is" basis. That contractual term doesn't release the seller from his obligation to disclose all known material defects. It just means that the seller won't fix the problems.

In your case, there are two questions to consider. The first is whether this drainage problem is really material. That may be a matter of opinion; one man's puddle is another man's swamp. A court ruling may hinge on whether the buyer can produce evidence that the problem is serious and must be repaired.

This Week in Real Estate

Washington Post real estate section this week, talked about how companies are developing different tools to evaluate the credit worthy of individuals who would otherwise be considered as credit-challenged individuals under traditional mortgage loan procesing systems. Lenders typically use different tools and formula to determine one's creditworthiness to borrow money for mortgage. However, if these same finance companies are still using the traditional credit scoring systems today, people with credit-challenged they would not qualify for the loan. A vast majority of people would buy houses if they could be considered as credit worthy individuals for mortgage purposes. How do people with no credit history, don't have sufficient funds for a downpayment and have high bills, high debt ratio, and with no documentable income can purchase a home then?

Every major institution in the home finance industry, from Fannie Mae and Freddie Mac to mortgage insurers and lenders, is working on techniques to "see through" applicants' special circumstances. The dominant credit-scoring technology firm, Fair Isaac Corp., is developing new tools to evaluate nontraditional credit histories by checking rent-payment records, telephone bills and utility payments. PRBC Corp. of Annapolis (Pay Rent, Build Credit) is attempting to become a national credit bureau for people who have minimal or no traditional credit histories with banks, card companies and the like.