Selling and Buying Property in a Noisy Area

airplane flying over neighborhood

The real estate market is all about trade-offs and compromise — particularly in a tight housing market, which California and a number of other states are experiencing today. When demand far outweighs supply, prospective buyers will go to great lengths to secure a property before prices again skyrocket — and shatter their dreams of home ownership.

Advice for Seller’s Agents

A high demand housing marketing is good news for seller’s agents.  Properties which might ordinarily be considered undesirable can all of a sudden become attractive to buyers. As buyers focus in on their highest priority features, they will make trade-offs.  For example, a buyer might trade off their desire to be in a quiet area for other higher priority features on their “wish list”, such as home size, number of bedrooms, or the fact the home is in a great suburb.

Disclose, Disclose, Disclose

When trying to sell a noisy property as a seller’s agent, the key is disclosures. Many lawsuits originate simply because something hasn’t been disclosed, when it should have been by law.

In most states, the seller is required by law to disclose any issue which can materially affect the property value, desirability and intended use of the property. This is certainly the case in California. You can read more about disclosures in real estate transactions in California.

Disclosures often relate to property defects or structural issues, but they can also relate to other factors, including noise. The noise might be a result of very obvious factors, such as a home being near an airport, situated on a main arterial road, or located next door to a railway line. Or, it could be less obvious factors — the home may be near predominantly student housing, there may be high crime rates in the area, or it might simply be a case of having one particular noisy neighbor next door. Whatever the situation, a seller cannot assume that the potential buyer will know there’s a noise issue. If the noise issue will affect the property value or desirability, it needs to be disclosed.

Future Noise Issues

Disclosure extends to future developments where this information is known to the seller or the seller’s agent. For example, you’re selling a property in what is considered a reasonably quiet area now.  But you have knowledge that future development will establish a new highway right alongside the property. The local county has plans to install new fencing as a sound barrier. But the volume of traffic in that suburb is expected to triple, meaning the “sleepy suburb” will become extremely noisy in the next 12 months. Do you need to disclose?

Yes, you do.

Because you have knowledge of this development, and it can materially affect the property value and desirability, you must disclose. Properties located on major roads or in noisy areas do generally sell for less. A failure to disclose could see you facing a lawsuit.

Understand the Consequences of a Failure to Disclose

Ultimately, if you fail to disclose important information to the buyer — or worse, you provide false information — you could face serious consequences on the basis of misrepresentation, negligence, breach of contract or even fraud.

Make sure you’re aware of disclosure responsibilities in your state to minimize your potential liability. Check out NOLO’s list of state disclosure requirements here.

Advice for Buyer’s Agents

If you’re a buyer’s agent, your clients may be looking at a noisy property as a means to simply get into the tight property market.

Because homes adjoining airports, train tracks, major roads, or noisy industrial areas traditionally sell for less, buyers can get more for their money if they’re willing to compromise. Sometimes noise issues can be improved through making improvements to the home, including window upgrades, additional insulation, or even the planting of trees or fencing as a noise buffer.

Be Honest and Transparent

One thing you don’t want as a buyer’s agent — your clients filing a lawsuit  6 months post-purchase, claiming the property isn’t what they thought it was. Disclosures and transparency are important for both seller’s and buyer’s agents when selling noisy properties, to make sure buyers understand exactly what they’re buying into.

Advise Your Client to Check out the National Transportation Noise Map

In many instances, the type of road noise can be an issue. While some buyers may not be phased by the sound of passing car traffic, roads where heavy vehicles and trucks are constantly hurtling down the road can be a deal breaker.

If your clients are planning to buy a home near a main transportation route, they can check out the National Transportation Noise Map, issued by the United States Bureau of Transportation Statistics. This resource makes it easy to type in an address and obtain a noise assessment for a property.

Advise Your Client to Visit the Property at Different Times

If noise is a known issue, encourage your buyer to visit the property at various times of the day and night to see how much the noise really affects them. For example, if your buyer is looking to purchase near the airport, try to schedule a time during the peak period for flights. They will then have a better understanding of how low the aircraft fly, and what the noise factor is.  They’ll be able to make a more informed decision as to whether they can live with the noise or not.

Minimizing Your Liabilities as a Real Estate Professional

For both seller’s agents and buyer’s agents, you need to minimize your chances of a lawsuit. Adequate insurance coverage is important to protect yourself and your business.  Having a comprehensive real estate E&O policy can give you peace of mind that you’ll be covered in case something goes wrong. Your CRES Insurance Real Estate E&O + ClaimPrevent® policy even comes with free Legal Advisory Services that you can access 7 days a week. To find out more about CRES Real Estate E&O, contact our friendly team at 800.880.2747.

This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.

Originally Published July 3, 2019

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