Market Uncertainty: 3 Things to Know When Buying or Selling Real Estate
The last several weeks have been marked by significant fluctuations in financial markets worldwide. Economists state that the Trump Administration’s recent tariffs are the primary drivers of market-related impact. In addition, thousands are also suffering due to job loss and other uncertainties. Typically, a change in an individual's or a company’s financial situation sometimes necessitates selling existing property and buying something more affordable. In other cases, a struggling market when finances are performing well might result in an investor “buying up.” Whatever your circumstance, I recommend considering the following when buying/selling your property:
Invest in a thorough and reputable inspector. In Virginia, real estate is sold pursuant to the doctrine of caveat emptor, also known as “buyer beware.” This simply means that a buyer is responsible for discovering defects and ultimately accepting all issues with the property, even if they are discovered after closing. There is, however, an exception for concealed defects (i.e., those that could not be reasonably discovered).
Sellers and buyers should, therefore, identify and vet issues with a thorough inspection before closing. Sellers should also consider leaning towards—rather than away from—disclosing a property's history and/or potential defects. Buyers should likely flag issues before closing (or risk waiving the right to any remedial action).
Consider existing encumbrances and obligations. Very few properties are truly “free and clear” of existing easements, covenants, and mortgages. Buyers and sellers should therefore take note of these existing issues before buying and selling a property. For example, properties in a condo or Homeowners’ Association may have a series of covenants limiting the ability to redevelop or change a piece of property. Similarly, existing utility or drainage easements could impact the ability to move the footprint of a house. I recommend reviewing the title examination associated with your potential purchase, along with the specific instruments. Any uncertainty should be discussed or vetted prior to closing – an experienced zoning attorney can provide insight and analysis.
Take your time and work with an experienced real estate agent. Desperate financial circumstances might compel rapid-fire decision-making. Nonetheless, having an experienced real estate agent (and, as applicable, an attorney) available ensures that the correct process is followed consistent with legal requirements. Experienced professionals should also provide adequate time to examine any lingering issues before closing.
Have questions about the legalities of buying or selling a property? Reach out to me at tstringham@kramerelias.com or (703) 202-7633 to discuss.
Theodora Stringham focuses her practice on bringing solutions-oriented representation and zealous advocacy to complex issues impacting individuals, organizations, and businesses. Ms. Stringham seeks to understand clients’ concerns and provide thorough and strategic options aimed at achieving their goals. She has been recognized for her work in the Real Estate, Labor and Employment, and Commercial Litigation practice areas, providing counseling and litigation support for a wide variety of Real Estate and Labor and Employment concerns.