Of course, no one ever wants their homebuying process to end up like that. So with Crotts\u2019 help, we\u2019ll look at some of the ways buyers can avoid a problematic \u201clemon\u201d home and explore next steps for buyers who find themselves with more of a home-sour-home than a home-sweet-home.<\/p>\n Lemon laws refer to defective automobiles, commonly referred to as \u201clemons.\u201d If you\u2019ve purchased a car that continues to fail certain quality standards (meaning, it ends up in the shop a lot!), then there are federal and state laws<\/a> that provide some recourse for the buyer against the manufacturer.<\/p>\n Lemon laws put the responsibility on car makers to produce and sell a reliable product.<\/p>\n The short answer here is, no \u2014 there aren\u2019t comprehensive lemon laws when it comes to real estate. But there are protections in place that are designed to prevent the sale of a \u201clemon\u201d house equivalent.<\/p>\n In many states, seller disclosure forms are required to complete a real estate transaction. Each state has different requirements<\/a>, but basically the seller is required to tell the buyer of any known problems with the house. This might include roof damage, foundation problems, systems issues, appliance malfunctions, and more. Though note that the specific information sellers are required to disclose can vary by state.<\/p>\n The key word here is \u201cknown,\u201d though. The seller isn\u2019t usually required to investigate every inch of their house for problems \u2013\u2013 that\u2019s the inspector\u2019s job (see below). The seller must report issues that they\u2019re aware of, but a seller legitimately may not be aware of all issues with their property.<\/p>\n Crotts says, \u201cSellers have to disclose what they know about the property, but they don\u2019t have to necessarily take action to go find out more. So the information you\u2019re getting on a seller\u2019s disclosure may or may not be complete.\u201d<\/p>\n He uses the example of a homeowner who may be asked about attic insulation. If they\u2019ve never been up in their attic, they may not know anything about the insulation, and they\u2019re also not obligated to go up and look at it.<\/p>\n Home inspections<\/a> are the best way for a buyer to prevent getting a \u201clemon\u201d house. An inspector will spend around three to four hours looking at all components and details of the house, from the basement to the chimney.<\/p>\n Basic home inspections don\u2019t cover everything<\/a>, though. A home inspector is only required to look on the surface in most cases. Issues beneath the flooring or behind the drywall won\u2019t be uncovered by a regular inspection, but inspectors will alert buyers of any questionable, tell-tale signs that may need to be further investigated by a specialist<\/a>.<\/p>\n In a fast-paced seller\u2019s market, sometimes buyers will forgo an inspection contingency in order to make their offer more attractive to the seller. This isn\u2019t recommended. But if you find that it\u2019s necessary for your situation, you may want to consider a pre-inspection<\/a> \u2013\u2013 hiring an inspector to do a limited inspection prior to making an offer. Ask your agent about your options in this case.<\/p>\n Home warranties help protect a buyer against certain home malfunctions for a specified period of time. For instance, if your air conditioning unit breaks down within the coverage period, the warranty company will pay for repair or replacement. Sometimes there is a deductible or service fee involved.<\/p>\n Many new construction homes<\/a> come with a home warranty from the builder. For existing homes, some sellers may purchase a home warranty<\/a> from a third party in order to offer additional peace of mind to the buyer.<\/p>\n Crotts says that some buyers (specifically those opting to waive inspection contingencies) may choose to purchase home warranties for themselves. A home warranty is not equivalent to an inspection, but it does offer a little more security if certain things go wrong. Check your specific warranty coverage carefully, though!<\/p>\n It\u2019s important to note that these protections \u2013\u2013 disclosures, inspections, and warranties \u2013\u2013 are not the same as lemon laws for cars. In real estate, the responsibility of determining whether or not a house is in decent, livable condition falls to both<\/i> the seller and the buyer. That\u2019s why due diligence<\/a> on the part of a homebuyer is vital.<\/p>\n Beyond these main protections, there are a few more things a buyer can do to safeguard themselves against \u201clemons\u201d prior to their home purchase.<\/p>\n Always choose a licensed professional to ensure proper training standards have been met. If your inspector isn\u2019t licensed, you might as well just have your uncle who \u201cknows about houses\u201d take a look at the property. (That strategy is not advisable, by the way!)<\/p>\n Take the opportunity to join your inspector during the process. Ask all questions as they come up, so that you understand the realities of what you\u2019re walking into.<\/p>\n Post-inspection, ask your agent if you need any specialty inspections<\/a>. These might include pest, mold, foundation, roof, systems, or pool inspections.<\/p>\n Buying a house that needs work isn\u2019t necessarily a bad thing, as long as you\u2019re prepared for the expense. If the disclosure or inspection indicates the need for repairs, have a contractor give you an estimate of the costs so you can budget accordingly.<\/p>\n Have other homes in the same neighborhood or built by the same company had problems? Ask your real estate agent to do some digging about the builder\u2019s reputation.<\/p>\n Look at public records, including sales history (which may give you a hint if it\u2019s ever been \u201cflipped\u201d), police blotters (which could have information about a fire), FEMA flood background (which may give an indication of water damage), and so on. Your agent can help point you in the right direction.<\/p>\n Literally. Ask the seller to provide you with a CLUE (comprehensive loss underwriting exchange) report, which shows any insurance claims on the home. Make sure that any claims were repaired to code.<\/p>\n Homebuyers have a few courses of action when it comes to problematic houses. If you\u2019re dissatisfied with the condition of your home post-purchase, consider the following steps.<\/p>\n Check the disclosure for any indication of problems. If you suspect that the seller may have withheld information, they might be liable for the cost of any repairs.<\/p>\n \u201cTalk to your agent,\u201d Crotts says.<\/p>\n \u201cYou may find out additional information as to whether or not you should be talking to an attorney, or if it’s something that can be worked out on a more congenial basis with the seller.\u201d<\/p><\/blockquote>\n Some states do have an option for you to go to mediation or even to sue to get your money back, but only if you can prove that the seller knew there was something wrong with the house and didn\u2019t tell you about it. Often that burden of proof is challenging to meet.<\/p>\n Crotts tells of a seller who filed an insurance claim for hail damage but didn\u2019t disclose that damage to the buyers. In that case, the buyers had all the proof they needed to win the case.<\/p>\n Remember that a legal process may be more expensive than it\u2019s worth. Working out a compromise with the seller may be in your best interest. And if you didn\u2019t get an inspection \u2026 well, you\u2019re probably out of luck.<\/p>\n Examine your inspection report to see if there was any indication of the specific problem you\u2019re experiencing. Did the inspector miss something that\u2019s now causing your issue? If you suspect negligence on the part of your inspector, you may be able to sue them for damages.<\/p>\n Again, you\u2019ll need to prove that the inspector didn\u2019t do what they were specifically contracted to do<\/a>. To do so, you will likely need to hire an attorney, along with two or three additional inspectors who could back up your claim from a professional perspective.<\/p>\n Depending on your policy, the repairs or damage on your home may be covered. However, most policies have clauses that exclude pre-existing damage<\/a>.<\/p>\n If the insurance adjuster determines that the problem with your home predates your purchase date (and therefore their coverage date), then they may deny the claim. Ask your insurance agent for more information regarding your specific situation.<\/p>\n![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/05\/Avoiding-a-lemon-house-666x381.png\")
<\/a>What are lemon laws?<\/h2>\n
Is there a lemon law for houses?<\/h2>\n
Seller disclosures<\/h3>\n
Inspections<\/h3>\n
Home warranties<\/h3>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/05\/Avoiding-a-lemon-house-3-666x381.png\")
<\/a>What other options can help prevent you from buying the equivalent of a lemon house?<\/h2>\n
Verify your inspector\u2019s licensing<\/h3>\n
Attend the inspection<\/h3>\n
Follow up with additional inspections<\/h3>\n
Consider a contractor assessment<\/h3>\n
Research the builder and development<\/h3>\n
Research the house<\/h3>\n
Get a CLUE<\/h3>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/05\/Avoiding-a-lemon-house-2-666x381.png\")
<\/a>What happens if you think you have<\/i> bought a lemon?<\/h2>\n
Go back to your seller\u2019s disclosure<\/h3>\n
Look closely at your inspection<\/h3>\n
Consult your homeowner\u2019s insurance policy<\/h3>\n
Check for new homebuilder laws in your area<\/h3>\n