Iowa Seller Disclosure Form - Why you will get sued by the buyer

Recent Iowa court cases make it clear the law in Iowa will be read liberally and in favor of a complete disclosure that leaves no stone unturned. Sellers who are familiar with Iowa’s case law will ask what am I supposed to do. How much should I disclose? The “what ifs” will roll around in their heads night after night and in the end when they get sued the sellers will look for anyone else to pay a potential judgment.  What you said may be misconstrued. What you didn’t say will become even more critical. Remember the agents and brokers are being paid thousands of dollars in commissions. The sellers expect something in return besides just hand holding and a ride in your carriage-top sedan.

So what are you as the sellers real estate agent supposed to do? You need to strongly suggest they see an attorney for two purposes:

1.    First, to have the Iowa Seller’s Disclosure Form reviewed before it is provided to any potential buyer in order to add another layer of professional review that can protect your client the seller. While not every possible risk can be identified having a lawyer provide advice to your seller about the home repairs that have gotten other sellers in trouble is invaluable. What you want is to provide the best service possible so that sellers refer other sellers to you as a Realtor who can get the job done while providing valuable professional real estate service. $250.00 is the standard charge for working through the seller disclosure form.

2.    Second, to have all written offers reviewed by an attorney because there are provisions being inserted in real estate contracts that are not in the seller’s favor. This is necessary because real estate agents don’t fully understand the legal implications of the terms being inserted into written offers and how they protect the buyer but do nothing to protect the seller. This is a trap for the unwary seller and with agents and brokers being paid thousands of dollars in commission you will become a target with any future litigation. $250.00 is the standard charge for reviewing the buyer's written offer.

Be prepared to tell your sellers they are better off spending $250 to $500 for a legal opinion and adding another layer of protection against spending tens of thousands of dollars on hiring a lawyer to defend them against any future claim.

In a recent case a licensed real estate agent asked us to intervene when the hot tub disclosures were considered by the buyer as inadequate. Those allegations cost the seller an additional $750 in repairs even after the closing. In addition the seller needed a formal Release and Satisfaction drawn up to stop any further requests for repair work. This information is not intended to scare you, it is intended to make you aware of what is happening when buyers experience buyer’s remorse and have limited funds set aside to make home repairs. Let the blame game begin.

This area of the law is a mine field – so don’t be the one who steps on a landmine. Call us, contact the Lombardi Law Firm and ask for either Steve Lombardi or Katrina Schaefer. Steve Lombardi is an attorney with 30+ years of experience in litigation as well as a licensed real estate broker. Katrina Schaefer is an attorney licensed in Iowa and Georgia and a recent graduate of the University of Iowa College of Law.

As a lawyer and real estate broker I'm reading the Iowa cases and realize this disclosure statement for sellers is a trap for the unwary. Steve Lombardi

The Lombardi Law Firm

1300 – 37^th Street, Suite 4

West Des Moines, Iowa 50266

Telephone: 515-222-1110

Fax: 515-222-0718

Email: sdlombardi@aol.com or katrina.schaefer8@gmail.com