Signed a contract to purchase a home and when title work and appraisal came in it was discovered that the home was in a flood plain . This was not noted in propeery disclosure ,as seller indicated it was NOT in a flood plain.
So my question now is who is responsible to pay for the appraisal and termite inspection that was ordered for us by the bank? These things are in our name ( buyer ) but are we responsible if the disclosure was incorrect ? We do not want to buy the home and are backing out of deal and so far will get our earnest money returned.

Real estate law goes by state, but I know of no law that provides for damages when a disclosure is later shown to have false statements. There is merely a penalty to failure to provide the disclosure. You would have to sue for damages. It might be tough to win this case, because the seller may have believed that the property was not in a flood plain; in other words he didn't knowingly lie, even though he didn't check the 'don't know' box.

A property disclosure doesn't take the place of diligence. You could have found out about the flood plain before spending a dime. Of course it usually doesn't work that way. Countless real estate deals fall through after money is spent and there is no recourse.

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Originally Posted by joypulv

Real estate law goes by state, but I know of no law that provides for damages when a disclosure is later shown to have false statements. There is merely a penalty to failure to provide the disclosure. You would have to sue for damages. It might be tough to win this case, because the seller may have believed that the property was not in a flood plain; in other words he didn't knowingly lie, even though he didn't check the 'don't know' box.



A property disclosure doesn't take the
place of diligence. You could have found out about the flood plain before spending a dime. Of course it usually doesn't work that way. Countless real estate deals fall through after money
is spent and there is no recourse.

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Thank you for the answer which is what I figured, but when a realtor completes a listing form it is right there in a check box , yes or no answer . Too bad they don't take the time for both seller and potential buyer to make one phone call to the city zoning commission to have a accurate listing!
I though the reason we use a realtor is to protect our interests ! NOPE
Call the zoning commission!

Huh? The realtor doesn't fill out a property disclosure unless he is the seller.
A realtor represents the seller unless he represents the buyer.
He knows he isn't responsible for the disclosure.
If you are talking about the LISTING, the realtor isn't responsible for that either, and usually there is a disclaimer on it.
Any buyer who is about to put himself into massive debt for most of his life needs to know every little thing that each party is liable for, OR hire a lawyer to do it.
I have never hired a lawyer until just before the closing, and I've bought and sold several times, and just when I think I know everything - it turns out I don't.
You aren't alone, and your only consolation is that many people suffer much, much worse than the cost of 1 appraisal and 1 termite inspection.

Personally I wouldn't walk away from a house in a flood plain right off the bat. These days, any house within a stone's throw of a babbling seasonal brook is in a flood plain. Your insurance might cost more, but if the property has never flooded, you could just drastically lower your offer.