Your new home has a septic tank instead of being connected to the sewer. Or, something ominous is lurking underneath your floorboards, like termites, rodents or mold.
Your first thought as you watch sewage from your septic tank backing up out of your toilet and onto the bathroom floor might be along the lines of, “It’ll be OK because I have homeowners insurance.”
Your second thought might be: “I bought a house with an abandoned septic tank. Can I sue the seller after the closing for tricking me into buying a house that I would never have bought if I had more information?”
Yes, say many experts. But solving homebuyer’s remorse isn’t easy.
Yes, You Can Sue
All states handle these lawsuits differently, but generally, you can sue a seller after closing for not disclosing problems with your house.
If you think you need an attorney, you should get one in your state who specializes in real estate issues, says Ben Fisher, a real estate agent in Park City, Utah, and co-owner of The Fisher Group, which specializes in luxury homes.
Ideally, Fisher says, “the attorney will reach out to the responsible parties for not disclosing the problems, to settle things out of court.”
What To Consider Before Suing a Home Seller
Your house is an asset that will probably grow in value over time, but parts of the home will also lose value. Think of the roof. If you buy a house that’s been around for a while, there’s heavy rain soon after you move in and the roof starts leaking, that may simply suggest that you have old shingles and not that you were dealing with dishonest sellers.
On the other hand, if your seller didn’t disclose a septic tank, it’s now leaking sewage everywhere and you’re already contacting your homeowners insurance company to check your policy, nobody can fault you for wondering if you should turn to an attorney.
“In some states, nondisclosure of property damage is considered fraud,” says Joel Efosa, the CEO of Fire Cash Buyers. (Efosa specializes in buying fire-damaged houses. There’s actually an entire industry surrounding that concept.)
But while your sellers may have defrauded you, you still have to substantiate that.
“You will have to get an attorney to prove they knew about the flaws in court,” Efosa says.
You May Not Want to Sue the Seller
Kelly McCann is a lawyer with his own practice, Burnside Law Firm, in Portland, Oregon. He says that the seller typically isn’t the best person to sue.
“Generally, the home sellers’ insurance policies won’t cover a lawsuit for failure to disclose flaws in the home,” McCann says. “This is a problem for you, as the homebuyer. It means you may win the lawsuit but be unable to collect any money.”
McCann recommends that most people steer a lawsuit to the home inspector or possibly a contractor who worked on the home. On that note, your home inspection plays a critical role in helping you avoid unexpected surprises.
“Home inspectors have insurance coverage for their negligence. This means that if you win, you are far more likely to be able to collect money from the judgment,” McCann says.
It also may be fairer. The seller isn’t a real estate professional and may be as clueless with real estate as you are (no offense).
McCann also suggests training your legal sights on your real estate agent. For instance, if your sellers didn’t tell you about the septic tank, is that really their fault? Maybe the agent should have said something.
Or, sue the broker and the homeowner, McCann suggests: “There’s no need to choose between two liable parties.”
There Are Other Alternatives Beyond Suing
Fisher points out that when a major system in your home malfunctions, it can still be covered by a manufacturer’s warranty or a home warranty that the seller purchased previously.
There are other avenues you may want to try, especially if you haven’t moved in yet and you’ve just put down your earnest money, which is the fund that shows the seller you’re serious about buying the home.
“You might be able to rescind the purchase agreement and get your earnest money back,” says Jennifer Spinelli, founder and CEO of Watson Buys, a cash home-buying company based out of Denver.
If you want to cancel a contract with a seller, and you don’t have a truly good reason for doing so, such as somebody selling their house with unknown (to you) septic tank problems, keep in mind that we live in a very litigious society. If you whip out your lawyer and threaten to not follow through with a purchase agreement, you could find that you’re the one being sued.
This article originally appeared on MoneyGeek.com and was syndicated by MediaFeed.org
More from MediaFeed:
How much does it cost to remodel a house?
In the world of HGTV renovation shows, remodeling a home might look like a breeze. Interior design pros tackle a home in an hour, including commercial breaks, and finish on time—not to mention, miraculously under budget. But in real life—which, let’s be honest, is rarely like reality TV—how much does it cost to remodel a house?
Home remodels can sometimes be complicated and costly. Creating a budget beforehand could help avoid the headaches and hard choices that can crop up down the line. So turn off that home renovation show, grab a pen and paper, and start planning out your home remodel.
DragonImages / Getty
There’s no one magic number a homeowner can bank on when it comes to the cost to remodel a house. However, there are several factors to take into account when budgeting for a home remodel: high-end versus mid-range versus low-end remodels, the type of home, and the number and size of rooms to be renovated.
Deposit Photos
A renovation of a 2,500-square-foot home could cost anywhere between $15,000 and $200,000 on average with the variation in price stemming mostly from the scale of the projects. According to HomeAdvisor, a homeowner generally can expect to complete the following home remodels within each budget range:
- Low-end home remodel: A low-end renovation would include small changes such as new paint, updated hardware, and fresh landscaping. It might also include inexpensive finishes like new counters and flooring. Budget: $15,000-$45,000
- Mid-range home remodel: In addition to the low-budget projects, a mid-range home renovation includes full-room remodels like a bathroom and kitchen, as well as a higher quality flooring than the low-end renovation.
- Budget: $46,000-$70,000
- High-end home remodel: A high-end home remodel would include the low- and middle-end projects, as well as high-quality finishes including custom cabinetry and new appliances. It might also include improvements to the foundation, HVAC, plumbing, and electrical.
- Budget: $71,000-$200,000
As a homeowner, you can expect to customize your home remodel budget once you identify what rooms you want to upgrade and to what extent. Only one in five homeowners finish home remodels under budget, so it’s smart to pad estimates by 10 to 15 percent in the event of unexpected renovation costs.
Malkovstock / iStock
Older homes will typically need more attention during the home renovation process, especially as new issues arise when existing problems are addressed. Once walls and floors are opened up, for example, a homeowner might realize the wiring and plumbing are outdated and should be brought up to code.
While a house won’t necessarily be unsellable if everything isn’t up to code, there could be issues with sellers financing because lenders generally will not close on a house where health and safety issues are identified as problems.
If your home is deemed old enough to be considered “historic”—which is generally 50 years or older, according to the National Park Service —you’ll want to check on any existing guidelines that your city’s codes office may have of if there’s a historic overlay that enforces the need for an architectural review.
Designated historic properties in states like California, where owners of qualified historic buildings can receive property tax relief for maintaining their homes, could boost a home’s value up to 16 percent.
Depending upon the condition of the house and any past upgrades, its age can have an impact on the cost of a home remodel, but so too can the type of home, regardless of age. HomeAdvisor estimates that Victorian homes generally cost the most to renovate—anywhere from $20 to $200 per square foot—and that farmhouses and townhouses tend to have the lowest cost per square foot, between $10 and $50.
Depositphotos
For many homeowners, an ideal home remodel would cover every inch of the house, but for the budget-conscious, that’s not always possible.
When it comes to home-renovation expenses, generally not every room is created equal. Rooms with cabinets and appliances—think bathrooms and kitchens—tend to be the priciest and are often where a home remodel budget can go awry.
m-gucci/istockphoto
The typical range for the cost of remodeling a kitchen comes in between $13,289 and $37,612 with $25,449—or $150 per square foot—being average. But kitchens also can have the most variation when it comes to cost, depending on cabinetry, finishes, appliances, and other add-ons.
Here’s what a homeowner might expect to pay for a home remodel of a kitchen:
- Low-end kitchen remodel: new lighting, faucets, coat of paint, refreshed trim, and a new but budget-friendly sink backsplash. A low-end kitchen remodel also might include knocking down walls or a counter extension project. Budget: $10,000-$30,000
- Mid-range kitchen remodel: new appliances, floors, and tiled backsplash to the sink and countertop. A mid-range kitchen remodel might also include new cabinets and mid-range slabs for the countertop. Budget: $15,000-$30,000
- High-end kitchen remodel: custom cabinets, high-end countertops like rare stone or granite, and deluxe appliances. When the budget for a kitchen is expanded, the projects start to take on custom finishes. Other projects might include new lighting, hardwood flooring, and new faucet fixtures. Budget: $30,000 and up
Because a kitchen can be extremely customizable and include so many levels of finishes, your home remodel budget could fluctuate greatly due to the cost and availability of materials, the labor involved, and where you live.
Feverpitched/ iStock
Bathrooms take on a similar budgeting structure to kitchen remodels. The typical range for the cost of a bathroom remodel is between $6,122 and $15,370 with $10,740 being average, but that budget includes a range of projects, customizations, and features.
For example, new cabinets in a bathroom can account for up to 30% of the budget. Other big-ticket items come in on pricing based on whether you choose low-end or high-end finishes.
On the low-end, a new bathtub might cost around $400, but if you are looking for a high-end tub, you could pay upward of $8,000. Similarly, a sink can run anywhere from $190 to $6,500 while a toilet might cost between $130 and $800.
Feverpitched / istockphoto
Budgeting for a bedroom remodel can be a little more cut and dry since it generally doesn’t include as many costly fixtures as you might find in the bathroom or kitchen. You can expect to remodel your bedroom for around $7,880 on average.
This typically includes installing new carpet, windows, and doors, as well as refreshing the molding or trim. A bedroom remodel might also include new heating and insulation and updated wiring and lighting.
Remodeling a master suite could cost a bit more since it typically includes a bathroom and bedroom renovation in one.
If you want to add or expand a closet in the master suite, you can estimate adding around $2,000 to the room’s budget, on top of the bathroom and bedroom, as well as $870 to $2,480 for a closet organizer.
JZhuk / istockphoto
Similar to a bedroom remodel, a living room remodel can be more economical, costing between $1,500 to $5,500, on average. Like the bedroom, living rooms tend to lack the “wet” features, plumbing and appliances, that can drive up the cost of the bathroom and kitchen.
If you plan to add a fireplace feature to a living room, expect to spend a bit more. A fireplace could add up to $3,700 per room.
LightFieldStudios/istockphoto
Updating roofing and refreshing the exterior of a home is a common part of a home remodel. A new roof could cost $20,000 on average, but will vary depending on materials.
Adding new siding to a home typically costs around $14,000 but once again will fluctuate based on the material used. Painting the exterior of a home will cost between $1,737 and $4,136.
DepositPhotos.com
A home remodel isn’t just financial spreadsheets. There are other considerations you as a homeowner may want to consider — like if you are planning to sell the house or make it your forever home — before taking a sledgehammer to a room.
DepositPhotos.com
A renovation project could take anywhere from a few days to a few months, so you may want to plan your home remodel timeline accordingly. It might be tempting to duck out of town when big projects are underway, but staying around means you can monitor projects and provide answers to your contractors if any unexpected issues arise.
Additionally, home renovations can be stressful and might be best scheduled around other big life events. For example, you might think twice about a full home remodel that coincides with a wedding, the holidays, or a baby on the way. Unexpected events could arise, but there often is no need to pile on projects with other major life events going on simultaneously.
DepositPhotos.com
Before diving deep into plans, you may want to consider who your home remodel ultimately is for. Is it for you to enjoy decades from now, or is it to make the house more marketable for a future sale? The renovation could take a different shape depending on your answer to this critical question.
If the remodel is just for you as the homeowner, you might choose fixtures based on personal taste or decide to splurge on high-end bathroom features that you will enjoy for years to come.
On the other hand, if you plan to sell within a few years, you may consider tackling projects that have the greatest return on investment (ROI), which could mean prioritizing projects like a kitchen update or bathroom remodel.
didecs / iStock
When deciding to take on a major home remodel, it’s helpful to expect the unexpected. Unforeseen delays like a shortage of materials during a global pandemic could extend your home remodel timeline, or emergency expenses could drive a project over budget. As a general rule of thumb, estimate at least 10% for emergencies or unexpected costs.
DepositPhotos.com
Coming up with the money to finance a home remodel can be daunting enough to make some homeowners abandon the whole process entirely. However, there are multiple financing avenues you can explore.
Pattanaphong Khuankaew / istockphoto
Homeowners who take on small renovations and have liquid savings might decide to pay for everything out of pocket; this means not having to deal with debt or interest rates.
However, paying cash for a large project can be challenging for some homeowners and might lead to cutting corners on important elements in an effort to keep costs down. Plus, unexpected emergency costs could drive you into unexpected debt.
Paying for a home remodel out of pocket is possible for some homeowners, but it’s not the only way to finance your renovations.
yunava1 / iStock
Another alternative to financing your home remodel is borrowing money from family members or friends. While this may save you from having to deal with loan applications and approvals—and potentially provide more flexible terms—it can come with its own share of issues, such as risking the personal relationship if you are unable to pay back the lender.
Additionally, loans from family members may be considered gifts by the IRS—and, thus, may be taxable—so it’s wise to discuss this method of financing a home remodel with a tax professional before proceeding.
DepositPhotos.com
A HELOC, or Home Equity Line of Credit, allows homeowners to pull a certain amount of equity out of their home to finance things like renovations. Qualifying for a HELOC depends on several factors, including the outstanding mortgage amount on the home, its market value, and the owner’s financial profile.
HELOCs typically come with an initial low-interest rate, and a homeowner generally has the option to only pay interest on the amount they’ve actually withdrawn. However, HELOCs also could have high upfront costs and can come with a variable interest rate with annual and lifetime rate caps.
designer491 / istockphoto
If you don’t have the cash on hand or enough equity in your home for a HELOC, then a personal loan is another consideration. An unsecured personal loan is generally an unsecured installment loan that isn’t attached to your home equity and typically can be funded faster than secured loans and with fewer or no upfront fees.
Personal loans might be a good option for people who recently bought their homes, need capital quickly for unexpected reasons, or need a loan for their home improvement project.
DepositPhotos.com
The cost to remodel a house will depend on the number of rooms you decide to renovate, the degree to which each room is remodeled, the materials you use, and of course the area in which you live.
Opting to DIY projects in various rooms could also help bring down the budget, but it can be smart to bring in a professional for more specialized projects like electrical and plumbing.
Before you get started, consider mapping out a plan that prioritizes which projects you tackle first and how you intend to finance your home remodel.
Learn More:
This article
originally appeared on SoFi.comand was
syndicated by MediaFeed.org.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 Opens A New Window.. For additional product-specific legal and licensing information, see SoFi.com/legal.
Chainarong Prasertthai // istockphoto
Featured Image Credit: DragonImages/istockphoto.