Not everyone has the competence to know everything about his house. Therefore, it becomes very significant with a comprehensive and well-documented review by a building expert (former appraiser), Finn Christian Hovde Hagen at Fremtind, the insurer for SpareBank 1 and DNB, says in a press release.
Hovde-Hagen is a specialist in home sale insurance, and what he and the real estate industry keep familiar with home buyers and sellers is that as of January 1, you can no longer sell the home “as is.”
In practice, this means that the home seller becomes liable for all defects and defects in the property, including hidden defects.
– The status report according to the new regulations will be reassurance to you as a seller, that you are not responsible for the errors and deficiencies mentioned in the report, says Hovde-Hagen.
Duty to provide information
In Fremtind’s press release, they also notified home sellers that effective January 1, 2022, all condition reports for homes for sale must comply with the new regulations, so that the seller can fulfill their obligation to provide information.
For legislative changes, a regulation has been drawn up that defines how the status report should be drafted. It gives both the seller and the buyer a much better condition report, which will provide the information you need before the home is sold, Hovde-Hagen says.
Eiendomsmeglerne Lars Erling Lossius, Vidar Myklevoll and Daniel André Adamsen are the Managing Director of EiendomsMegler 1 Alta, DNB Eiendom and Partners Eiendomsmegling Alta, respectively.
They also make the seller aware that even if the home is offered for sale in 2021, they should be able to refer to the approved condition report in 2021.
If you believe your home will only be sold after January 1, 2022, we recommend obtaining a condition report that meets the new requirements, Alta real estate agents write in a joint press release.
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Fremtind also states that the new law means it takes less before something can be called a defect.
Previously, defect costs had to correspond to about five percent of the purchase price, but with the new law, the amount limit was set at 10,000 kroner.
– This does not mean that you receive automatic compensation if you discover a defect of SEK 10,000 or more. If this is a fault or defect that the home buyer should have expected, for example in relation to the age of the home, or one that was discovered even before the purchase, the responsibility also lies with the buyer himself, says Hovde-Hagen.
– Disappointments and struggles
Alta real estate agents said in their press release that changes in disposition law and new regulations will together stimulate more and better information about homes before they are offered for sale.
The earlier the situation is clarified, the less room for frustration and disagreements later. It is in the interests of both the seller and the buyer that trading from home is as safe as possible. The buyer should be told what they are buying, and the seller should be able to delay the sale without risking too much claims afterward, real estate agents write in their joint press release.
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In the press release from the Alta real estate industry, they wrote that the condition report describes building parts and rooms in accordance with the requirements in the regulations for condition reports.
Certain parts of the building and rooms are not covered by the minimum requirements for what a condition report must contain. This applies to additional buildings such as garages and other free-standing buildings, retaining walls, floor partitions, and external stairs.
As a seller, you can request that they be evaluated by a construction expert and included in the condition report. How to transfer relevant information to the buyer in a secure manner. This gives you as a seller less risk of receiving complaints and requests from the buyer, real estate agents write in the press release.
Most appraisers in ALTA are now ready to file this new condition report. This will be somewhat more expensive than current rates and reports, but will be richer in content and suitable for a single home, they add.
These are the most important changes in home sales and purchases
Highlights and advice on the new rules:
- The seller is advised to prepare a case report that meets the requirements in the Regulations on Case Reports – “Authorized Case Report”
- What is clearly described in this status report or other sales documents becomes the responsibility of the buyer. This applies even if the buyer has not read the documents. Therefore buyers should read the report and all other sales documents carefully.
- The home should also be evaluated on the basis of, among other things, type, age, and visual condition. This means that buyers may have lower expectations for older homes than for new homes. There may be damages or defects that are not described, but the seller is still not responsible for them.
- The buyer must cover losses and costs up to NOK 10,000. This is a kind of forbearance (endurance) of the buyer where the seller is responsible. Thus this amount limit becomes important only to determine the price reduction or compensation if the condition of the property does not comply with the following from the agreement.
What do you need to take care of as a seller?
- Provide good and correct information! Ensure that the condition of the home is documented with an approved condition report
- Fill out the self-declaration to the best of your ability. Self-advertising is an important basis for further investigations and assessments by the builder, and for home seller insurance if you so desire.
- Incorrect or incomplete completion of a self-certification may result in liability to you in the form of recourse or default of any home seller insurance
- Read the status report and sales statement carefully to check that there are no errors or misunderstandings. Disposal Act and Regulations for Case Reports require that information be provided in clear and distinct language!
- If you are not sure if something is relevant, or if the information is sufficient, you should discuss it with your real estate agent and construction expert – before posting the information!
- The more you give, the lower the risk that the buyer will complain to you after the sale. Ask if you have any questions – before posting the information!
What do you need to take care of as a buyer?
- Read the case report, the estate agent’s description in the sales brochure and the seller’s self-certification carefully.
- You cannot complain about conditions about which you received information in a status report, sales statement, or in any other ways.
- Look at the grade of the condition and the estimated repair cost to get an idea of what you should account for in terms of costs and any work at home in the future. Remember that the estimated cost is not the same as the actual cost. Also note that the estimated repair cost is only to fix certain deviations, according to the home standard. Upgrading to today’s standard may cost more. For example, changing from flooring to parquet or re-insulating for better energy savings.
- Remember: Buying a used home is different from buying a new one. Assess the age, condition, and type of the home. In the old house, there may be inconsistencies that are not described, but you can not complain to the seller.
(Source: Alta real estate agents)
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