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What should you disclose when selling your home?

Seller Disclosures – Everything You Need to KnowSeller Disclosures

Seller Disclosures

If you are selling a home you will need to make a seller disclosure and this can cause a fair amount of anxiety.  However, it pays to remember that no one owns the perfect home so buyers expect to see some flaws.

Most homes on the market will come with a seller disclosure listing all the issues a home may have.  What this means for the seller is that the buyer will know what they are getting when they purchase the home and this helps the buyer make a decision and reduces the risk for the seller.

Both buyers and sellers should be aware that a seller disclosure statement does not replace any inspections that the buyer will need.  The disclosure only tells the buyer what the seller knows about the property and doesn’t provide any kind of warranty or guarantee of the property’s condition.  However, if anything is subsequently found to have been deliberately withheld or any false statements included the buyer can be held liable.


Here are the main points you need to know about seller disclosure:


What is a Home / Seller Disclosures?

A seller will fill out a home disclosure form before their home goes on the market which will list any of the known issues alongside the upgrades and repairs that have been carried out.  The Seller Disclosures helps a buyer make an objective evaluation of a property and saves them from any nasty surprises when they inspect the home.

It saves time for both buyers and sellers because a buyer can opt not to view a property that they feel may involve too many repairs.  Each state has different forms that can vary in what they expect the seller to list.  The key thing to remember here is that under federal law home sellers are required to disclose any asbestos or lead paint in the property.


How do I complete the form?

This is usually one of the earlier forms you need to complete although the exact time scale can vary according to local laws and practice.  In some places, the disclosure is only handed to a buyer who expresses an interest and will happen just before the buyer arranges for an inspection.  In others, you may find the seller disclosure included in the listing when the property goes on the market.


What should I include in the seller disclosure?

The form itself will tell exactly what you put in and again, this depends on the state laws.  Home sellers in California, for example, have a set of very strict rules to follow, whereas in Alabama sellers are expected to disclose much less information.  Your Realtor will be able to help you with this but the main thing to remember is that the seller disclosure is not about minor breakages or decorative issues but relates to the structure of the home and the quality of life in the neighborhood.


The main things that the Seller Disclosures should include are:

  • Any structural defects
  • Electrical or plumbing problems
  • Heating, ventilation, and air conditioning systems
  • Any major works that have been completed on the property
  • Any construction that has been done on the home (and if permits were needed/obtained)
  • Lead paint and asbestos (this is a Federal requirement). Even if you think all the lead paint or asbestos has been removed you will still need to disclose this.
  • Flood risk
  • Neighborhood issues eg, problems with neighbors/frequent noise/antisocial behavior
  • Bankruptcies – if there is a bankruptcy associated with the home you must disclose it
  • Water rights (including wells) – this is more relevant for homes with no municipal supply or those in arid areas
  • Pests – If you have had a problem with any kind of pests you need to include this on your form
  • Paranormal activity – if you think there has been a haunting or the house has been exorcised you should disclose this. In some states like Arizona for example, this would be classed as a material fact which you would hide at your own risk
  • Emotional defects – this varies from state to state but particularly in California, you will need to disclose any kind of violent crime, murder, or other events that can be considered an emotional issue.  Some states require that you disclose deaths that took place within the property within a specified time.
  • If the buyer asks – if the buyer asks about something specific the seller should include this in their seller disclosure.


Find out your local regulations

Rules relating to seller disclosures are different in each state so it is important to find out which laws apply to you.  If you contact a local Realtor they should be happy to help, alternatively, you could contact your local housing authority.  Any local or state real estate association will hold the usual forms and these are normally very easy to complete with a simple checkbox system that you can use to answer basic yes or no questions.


Do I have to be honest?

Yes, you should be completely honest when it comes to filling out the form.  If you have a detailed seller disclosure form completed it can be much more reassuring to the buyers and viewers.  It can seem counter-intuitive because, after all, you want to present the property in the best possible light, however, if you fail to disclose key issues you could end up facing some serious legal problems later.

As a basic rule, you should focus on the same sorts of issues that a home inspector will be looking for.  If they do go in and find something you have not disclosed this can destroy trust with the buyer and can also mean that you end up facing the prospect of dramatically reducing the property price.

If a sale goes through based on an incomplete or false disclosure the buyer could well hold you responsible and you could end up in a lawsuit.

Although the disclosure points out the flaws in your home, there are plenty of things you can do to present the home at its best when prospective buyers come to view.  They may well fall in love with your home – even with a few minor flaws.


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