It's pretty hard to overstate the importance of performing due diligence. Fairbanks home buyers take note. One of your most important responsibilities during the purchase of real estate is to have a clear understanding of the property under consideration.
In Fairbanks the discovery period is typically 15 days, unless otherwise negotiated. A home remains the most significant assets in most folks portfolio and is certainly one of the most expensive purchases most will ever make. Take the time to fully investigate the property and satisfy yourself as to its condition.
Thank you for the great post, Margaret!
Whoops! That historic two-story colonial in North Bethesda, Maryland, purchased for a million dollars in 2006 by Montgomery County government with state funds, is NOT quite so historic, after all. At least, not in the context for which it was purchased by the county.
Citizen activists urged the county to purchase this property because the attached log cabin was reportedly occupied by Josiah Henson, whose memoirs inspired Harriet Beecher Stowe's title character in her novel Uncle Tom's Cabin. The resolution authorizing the county to make this purchase described the cabin as "a perfectly preserved slave quarter".
The Maryland-National Capital Park and Planning Commission applied for and received state funds, apparently without any verification of the oral history. Yet, according to an article in today's Washington Post, an accurate history of the site prepared by the county's preservation staff was "readily available".
While Henson did live on the 3,700 acre Riley plantation, he occupied slave quarters, not the cabin or house. The cabin standing on the property now was an addition to the original kitchen which, along with the slave quarters, is long gone.
"That inconvenient truth," as today's Post article calls it, "presents an immediate challenge to county officials: what to call the place. The site's official name is still Uncle Tom's Cabin Special Park."
And, of course, there's still the little matter of the county spending a million dollars to purchase the property and another million to expand it after closing without first performing appropriate due diligence to verify the oral history.
This story presents an interesting case study for those of us in the real estate business.
- Did the seller and/or listing agent (if any) advertise (or even mention) that "Uncle Tom's Cabin" was located on this property? If so, was it done with/without disclaimers as to the accuracy of the information?
- Was the county represented by a real estate licensee as a buyer broker? If so, did the agent recommend to the buyer a feasibility study period for verifying the oral history?
- Did the appraiser (if any) give any value for historical significance? If so, what documentation would he require? How much more value would historical significance add to the property?
- If you or I were the listing or selling agent in this transaction, what 3rd party documentation would our Broker require for our file as to any historical significance? Would Errors & Omissions insurance protect us if it turned out the oral history was just plain wrong and we did nothing to verify it on behalf of our clients?
What about you... how would you handle a situation like this, then (at contract) and now (after the error was discovered), if you were involved in the transaction?
Copyright 2010. All rights reserved.
__________________________________________________
For answers to your real estate questions about Bowie, Crofton, Davidsonville, Fort Meade, Gambrills, Odenton and other communities in Anne Arundel County or nearby Prince George's/Howard Counties, Maryland, contact Margaret Woda at Long & Foster. If you prefer, simply click on a button below for information you can review online at your own pace.
Jesse, when someone tells me they have a historic home, I want to see documentation. In the case of an oral history, I would consult with one or more local historians I know and also request assistance from the appropriate historical society (we have several).
Since I would have done this as the Listing Agent before the market launch, we wouldn't be in this situation. If I were the Buyer's Agent, I would have requested the documentation before writing a contract. If the Seller could not produce documentation, I would advise the Buyer to seek it out before making an offer.
Interesting dilemma. Thanks for sharing.
Jesse, what a fascinating story. I was always under the impression that when the government is buying there is a strict ritual to all verificatins and disclosures. It would be simply naive to buy something because the agent might have mentioned a historic fact without verifying.
Reads as a suspense
BTW, I received your e-mail and I apologize for failing to respond. It was not intentional, sorry
Jesse, go to hear from you. Just goes to show you government cant do everything.
Interesting information. You know it does bring up some good questions that need to be answered and serves as a reminder to us all - do your homework!
Jesse, thanks for the re-blog. It is an interesting conundrum, isn't it?
Maria - I don't know if there was a listing or buyer's agent... remember, this was during the bubble years when 15 contracts came in within hours of putting a "sale" sign in front of a property. I just don't know those details - I didn't see them in the article.
Great Blog Jesse...Thanks for bringing it to our attention. Many of the issues can and do vary from town to town and so we have to make sure we do know what is going on on each transaction