What happens if a seller finds a problem with the house after a sales contract has been signed?
On One Hand: The Sales Contract Should Give OptionsA signed contract for a home is not ironclad, especially if the seller discovers problems with the home after inspection. The seller is obligated to disclose the inspection findings. The buyer can then renegotiate or back out of the contract, depending on the problems and the contract terms. Contingencies are written into the contract to cover problems found after the sales contract is signed. Contingencies are the things that cause a contract to become nonbinding or void.On the Other: Secrecy Is Not an OptionMany state laws require sellers to disclose issues like mold, smoke or water damage, as well as other issues like historic building classification and location on a flood plain. Failure to disclose problems allows buyers the option, and legal cause, to sue the seller after the sale. Each state has a statute of limitations, or a limited amount of time during which the buyer can sue after buying the home.Bottom LineThe seller must t
