I'm the BUYER. I have no obligation, legal, moral or ethical, to disclose anything to the seller.
Every once in awhile I end up with a ton of equity, having paid very little for the property.
Some people might even say, “Joe, you stole it.”
They don’t mean it literally, obviously.
In fact, we used to brag about our “real steal deals” at investor meetings back in the day, and it was a heck of a lot of fun trying to “one-up” each other with our latest “great deal!” story.
But do we actually steal properties?
Of course not.
What does happen, though, is every now and then things work out better than planned and we look up and hey, there’s more profit on the table than expected.
It doesn’t happen often but when it does, it’s great stuff (especially when your last few deals didn’t quite go according to plan).
is it buildable?
Which brings us back to Phil’s deal last week. I had an opportunity to check it out yesterday and between you and me, I think I may have stolen it.
It’s actually a nicely wooded property on a river bend that’s absolutely gorgeous. In fact, I don’t think it’s wet at all.
I have no idea if it’s buildable or not (I’ll know sooner than later), but I’m delighted with what I’ve seen so far.
So what happens next?
I’m going to list it for $120k or so and see what the market tells me it’s worth. With any luck, we end up cashing a “monster profit” check sometime soon.
That would be very cool.
And I’ll be sure to post a copy of the check here on my website if that profit actually happens.
my obligations to Phil
As a real estate investor, do I have any obligations in terms of disclosure to the seller, Phil?
Would the ethical thing have been to tell him his property was worth far more than he agreed to sell it for?
Or should I have told him not to sell at all and instead educated him about the tax sale and why it might make more sense to let it go to auction?
No, no, and no.
I have NO obligation to disclose ANYTHING to Phil or any other seller. Phil, on the other hand, DOES have an obligation to disclose EVERYTHING to me.
What’s the Revised Code of Washington say about it?
In a transaction for the sale of residential property, the seller shall, unless the buyer has expressly waived the right to receive the disclosure statement, or unless the transfer is exempt under RCW 64.06.010, deliver to the buyer a completed seller disclosure statement . . .— RCW 64.06.020
What the law says
I’m the BUYER. I have no obligation, legal, moral or ethical, to disclose anything to the seller, and that IS the law.
If he’s priced it too cheaply or misses an opportunity to make more money by selling it to someone else or in some other manner, that’s too bad.
My job isn’t to inform him of it’s true value. He’s the guy who’s owned it for the last 10 years. I’m the guy who until yesterday hadn’t even seen it.
What would I know?
If he tells me it’s got little or no value and I can have it for a couple hundred bucks, I won’t be the one telling him he’s wrong.
I’ll be the one handing him the $200 check.
so, was it unfair?
Since county clerks are sending your office information on every deal I do, you’ll surely be getting a copy of my recorded deed soon.
I understand your AAG’s don’t believe investing $200 to make $100k is fair. Or that doing so cannot possibly be anything but a scam.
Good luck with that.