After a detailed search of homes in Bethesda and Chevy Chase, my clients found a townhouse that they liked enough to make an offer on. After a lot of back and forth, they agreed to pay top dollar for the property, subject to a house inspection.
My clients had not really planned on moving. Indeed, they had just paid $8000 for new hardwood floors upstairs in their current home, but suddenly, they had found this new townhouse, and they had decided to make the offer.
When we did the inspection, we discovered that the air conditioner was not 2 years old as the seller had promised, but actually was 11 years old. The hot water heater was electric, not gas, as the Multiple Listing printout said. (The seller had said it was electric in the seller disclosure, but the listing agent didn't pay any attention to that when inputting the listing into the MLS.)
The marble floor in the foyer wasn't marble; it is ceramic tile, despite what the listing agent had said in the multiple listing service printout. My buyers weren't too disturbed about that since they could see with their own eyes that it wasn't marble. Thedisturbing issue discovered at the house inspection, however, was that the MLS prepared by the listing agent clearly states that there is hardwood under the carpet in 3 bedrooms, and a wood floor in the family room downstairs (although it is obviously carpet.)
Given that the buyer paid top dollar for this property, in part because it had a new air conditioner and hardwood floors, the buyer is a little upset. The seller is willing to give a credit for repairs, although not enough for a two year old air conditioner, and nothing for new hardwood floors. The seller's explanation is that the information contained in the multiple listing service is deemed reliable but not guaranteed, and they are SORRY about the confusion.
While I understand that, I am a bit confused about the effect of the buyer's reliance on representations in the multiple listing service by the listing agent as to the nature of the property being sold. This was the only place that the buyer could get information about the house on which to base his decisions on the value of the house. The buyer did not feel comfortable pulling up the carpet which was securely glued down before negotiating for the purchase of the property since the elderly owner was still living there with all her furniture.
Now it seems that the options are (1) suck it up and buy the house that now appears to be really overpriced or (2) walk away from the house that they really want.
I remember learning as a young agent to NEVER EVER NEVER promise hardwood floors if you didn't absolutely know that there was hardwood there. I remember the story of the agent who promised that there was hardwood in the dining room, but it turned out the hardwood was just around the perimeter of the dining room rug, but under the rug was plywood. The story was that the mistaken agent gave the new buyers hardwood floors in the dining room as a house warming gift.
Similarly in the DC metro area, we never promise square footage, so that we don't have to give that extra 10 or 100 square feet of living space as a house warming gift.
So, is that all mistaken? Can I promise anything with impunity and let the buyer hold the bag? Is it caveat emptor still? So I can promise the buyer an elevator in a house, a two car garage, an acre of land, gas fireplace, seaside view - all in a studio apartment in South Dakota?
Can someone explain the rules of the game to me so I can explain them to my buyer? Because I thought an agent had to exercise due diligence to ascertain the correctness of what is said about the property being sold.
