When you are selling your home, a good seller disclosure might be your new best friend. The buyer and the seller don’t generally communicate during the transaction. However, this document discloses material information about the home based on the owner’s experience and knowledge, which can help the buyer make an informed decision.
The seller signs these forms, attesting that the information is accurate to the best of their knowledge. The disclosure can help prevent potential buyers from bringing lawsuits against the seller if the buyer discovers defects in the home after the property has been sold. It is in the best interest of the seller to be honest about any problems with the home, even if it gives the buyer more negotiating power. Disclosures are legal documents that can be used in court.
The requirements for seller disclosures vary widely from state to state. Your agent will have the correct form for the seller to fill out. The forms include questions regarding major repairs, environmental hazards, defects or things in need of repair. Generally, the seller is required only to make disclosures based on their observation and knowledge about the property from the time of their purchase through the date that the form was completed. However, the seller may also provide information they know about the home from before they purchased it.
Being up-front is best. “It’s important for them to be honest when answering the questions — and they also have space next to each item for comments so they can explain further on anything they are disclosing. For example, if they put that in the past there was a roof problem, then they can explain in the comments that it was due to hail damage and they had the roof replaced, etc.” If you don’t know the answer, it’s OK to put that down too.
The seller disclosure extends to both the home and its condition as well as the property. If the seller is aware of potential zoning changes, or if the home is in a flood plain, the seller must mention that as well. In some states, sellers are required to disclose whether someone died on the property; in the state of California, this disclosure is a requirement. Other types of things the buyer may want to know can also appear, such as whether the home is in a flight path of a major airport, or if there are any restrictions for remodeling the property.
The disclosure may include information about the home’s foundation, including whether there are any cracks in the foundation, or whether there has been any leaking in the basement. The seller may want to disclose the fact that major repairs were done to the plumbing, the roof, the electrical system or other infrastructure of the house and grounds. The seller does not have to guarantee that everything is now perfect, but often potential buyers are reassured to hear that the previous owners have taken care of these repairs, and this will be a plus for them in wanting to purchase the house.
The Realtor might wish to give the seller two copies of the disclosure, since almost always the seller will need to scratch something out that they didn’t read correctly the first time. That way they have a rough draft and a final neat copy to present to the potential buyers.
Realtor.com. By: Deidre Woollard