Skip to main content
You have permission to edit this article.
Edit
Mike Wells: Beware of what you "know." Sometimes it "just ain't so"

Mike Wells: Beware of what you "know." Sometimes it "just ain't so"

  • 0
{{featured_button_text}}

The coronavirus has put many things on hold, but perhaps home buying shouldn’t be one of them. Veuer’s Tony Spitz has the details.

Will Rogers (among others) is credited with saying it’s not the things we know that are the problem. It’s what we think we know “that just ain’t so.”

Daniel Kahneman, a brilliant analyst and psychology professor at Princeton, later won a Nobel Prize for his scientific validation of this insight. It turns out the brain takes a few facts and molds them into conclusions that may overshoot the facts of it all, but take us where we may want to go, anyway. In these situations, President Reagan’s advice should carry the day when you do not know important facts independently: Trust but verify.

Many of us could avoid expensive problems if we had just verified independently a material fact that’s represented to be true (generally, innocently). Which, to the surprise of everyone, is not correct.

Clients of mine were paying cash for an older home some years ago, they were getting a deal, and they did not want it to get away from them. They were sure there were no termite problems because their contractor brother-in-law had looked “under the house.” They reluctantly agreed to a professional termite inspection for a modest price at my urging. They thought it was an unnecessary “lawyer worry.”

This termite inspection before the scheduled closing revealed significant termite damage in a part of the large home that the inspector did not know to inspect, and it was going to cost $10,000 to fix it. The sellers complained loudly, but they had to pay for the damage under the contract. The deal closed a couple of days later, avoiding the best legal problem the clients did not have that was otherwise waiting for them.

If you’re new to the homebuying scene, there may be some common myths that can be costly when looking for your new house. PennyGem’s Justin Kircher has more.

Recently a smart employee of a company where I give general talks on the law called me. He had bought a used truck “as is,” and he failed to get a mechanic to inspect the truck. As it turned out, the truck had a major problem that any mechanic would spot easily, but the out-of-area dealer refused to take the truck back. “As is,” he said, means just that.

Why did the smart employee not get a routine inspection of the truck? He had a salesman who had a “good way” about him, it was Friday night, and he had money in the bank he was burning to spend on a truck that night. He wrote a check for $23,000 on the spot for a used truck that “looked good.” He did not want to let the deal “get away from him,” as the salesman with the good way said could happen.

The employee got the dealer to redo the deal significantly later only because the salesman with a good way had misstated (likely innocently) a material fact (which took the deal out of the “as is” category), although it took a lawyer to shake out that defining fact.

In both maters the individuals assumed something, innocently, and they did not get independent verification of a material fact.

Here is a rule you should commit to memory: before you make any sizeable purchase of a used item, verify the key moving parts of the deal. Do not let the deal speed you by commonsense steps you should take. With few exceptions, the deal will be there tomorrow, although you feel certain (at the urging of the seller) you will lose it.

Consider calling a knowledgeable friend for a quick courtesy question before you decide. Because your friend has seen around the proverbial corner, and you have not.

This trust but verify rule is not about the honesty of the other party. It is about commonsense. And it is another example of a best legal problem you easily can avoid.

Remember: An informed choice is a smart choice.

Mike Wells is a partner with Wells Law, PLLC in Winston-Salem. Contact him by email at mike@wellslaw.us or call 336-283-8700.

The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Get up-to-the-minute news sent straight to your device.

Topics

Breaking News