...I’d be willing to bet that 80% of the prospective home buyers and renters won’t read the required disclosure notice in the first place!
Chicago, IL (PRWEB) November 27, 2013
Minnesota’s new law places fines on real estate investors who sell a property as an installment sale or “contract for deed” who don’t give notice of certain disclosures as highlighted in the article published on July 5, 2013 written by Jeffrey Meitrodt of the StarTribune. The new law will place fines as high as $7,500 for each offense the real estate seller fails to give notice that will suggest to the prospective home buyers that they should get the property inspected, have it appraised, and take other precautionary measures when buying a home as a contract for deed.
This law is definitely beneficial to consumers; however, according to the a science experiment conducted at the 2010 Denver Metropolitan Regional Science & Engineering Fair only 10% of people will read a contract before signing. This article gives no mention as to whether people will read a disclosure notice before they sign a contract they don't read.
According to Zillow.com, consumers thinking of buying a home as a contract for deed would pay up to $450 on an appraisal, another $250 to $300 on a property inspection, and another $100 to $150 on a title search. If they actually acted upon the suggestions in the new government mandated law, they could spend over $1,000 just trying to decide if it's a good deal.
Founder of DICARO & ASSOCIATES, Nicholas di Caro says, "What happens if that 1 person out of 10 spends $600 or more conducting their assessment, or “due diligence” as to whether or not they should purchase the home, only to find out that it’s not a good deal? Should they blame the city regulators for making those suggestions? Should they go back to renting after they spent $1,800 investigating 3 different contract for deed deals, only to realize that the price of bad credit and unsubstantiated income is to pay cash for the home or pay a premium in the form of an installment sale?"
It takes two people to create a deception. Without a willing participant a deception cannot take place. The world would be a better place if more people would take responsibility for their actions. This new law is good for the community; however, it won’t change human nature.
Dave Rutherford, Client Relations Manager for DICARO & ASSOCIATES suggests that prospective home buyers should ask a realtor or real estate attorney the following question: “What should I do before I sign this piece of paper?”
It’s kind of like the question people with high-cholesterol never ask their health care provider: “Doctor, what precautions should I take before I eat this deep fried pizza?”
Nicholas di Caro is the Senior Investment Partner and Founder of DICARO & ASSOCIATES, LLC. A Chicago based private equity firm that invests in performing mortgages, trust deeds, agreements for deeds, land contracts, triple net leases, billboard leases, and cell phone tower leases. They will pay cash for virtually any investment-grade receivable secured by real estate.