Real estate disclosures come with many questions for both a buyer and seller. Our rule of thumb? Be as open and honest as possible. In our latest post, we will cover what you need to disclose by law.
Being an open and honest seller will not only help you avoid a lawsuit, but it will also make you a trustworthy, stand-up, all-around person. Hiding defects, looming repairs, and any other issues with the home will only come back to bite you in the end. Whether through a lawsuit or good ol’ karma… if you believe in that sort of thing.
Most real estate lawsuits occur because of non-disclosure.
So exactly how much are you required to disclose legally? Basically, anything that can affect the value of the property. Here are just a few of the things you should address:
- Issues with the land, such as drainage, bad soil, and potential for flooding. Bad soil can limit buildings and low-lying areas can be prone to flooding and water damage.
- Foundation level and known cracks must be disclosed. If the house settles more than it already has, it could experience structural damage.
- Plumbing problems, sewer issues, and leaky pipes all need to be brought to the forefront. Some of the most expensive home repairs stem from water damage.
- Any problems or irregularities with the heating and cooling systems should be addressed.
- If you have a problem with cockroaches, rats, ants, termites, or moles, you will need to inform your potential buyer.
- Have a leaky roof or missing shingles? Tell your buyer before they find out during a rainstorm.
- Lead paint is a no-brainer. This disclosure is one of the most common you will see with home sales and rentals.
- Are there issues that will affect the title? Or rightful ownership? This needs to be spelled out up front, not during the closing process.
- You should also have documentation for repairs and insurance claims you’ve made in the past. You should be able to describe what was done and the materials used.
Additionally, some states will require more in-depth disclosure of hazard zones which include flooding, earthquakes, and other environmental factors affecting the land. Some states will also require any violent crimes committed in the home to be common knowledge. Not every state requires this, but it is a good rule of thumb to follow. Think about what you would want to know if you were buying a home for yourself!
Disclosures help a buyer learn as much as possible about a house before making their purchase.
You are selling a great home, right? When you keep something to yourself, a minor, needed repair can snowball in much bigger problems. Many properties have something pop up during the inspection that the seller wasn’t prepared for. Imagine, your asking price slashed because of a defect you were unaware of. Your house is a multi-faceted machine. Many sellers choose to have their homes inspected prior to a sale. This allows them to make the necessary repairs ahead of time, lessening potential buyers’ bargaining ability. An inspection will also show good faith in selling. You are telling the world you want your home to be in the greatest possible condition before it is sold.
Disclosure rules vary from state to state. Your agent, attorney, or broker will be able to supply you a checklist that covers the requirements for your state. Review the list in its entirety and add as many detailed notes as possible. Don’t forget to include the dates of upgrades and repairs. Fill out the form as honestly and as completely as possible. If you have questions, it is best to talk to a lawyer instead of your agent. Your agent might avoid such questions as they are out of their scope, and they want to lessen their liability.
When it comes to real estate transactions, both buyers and sellers often have many questions about disclosures. As a general rule, it’s best to be open and honest about any issues with the property. In this post, we’ll provide an overview of what you need to disclose by law.
Being transparent and forthcoming as a seller can help you avoid legal action and establish your reputation as a trustworthy person. Concealing defects, necessary repairs, or any other issues with the property will only come back to haunt you in the long run, whether through a lawsuit or karma if you believe in such things.
Non-disclosure is the leading cause of real estate lawsuits. So, what are the legal requirements for disclosure? Basically, anything that could potentially impact the property’s value must be disclosed. Here are some of the things that you should address:
- Land issues, such as poor soil, drainage problems, and susceptibility to flooding or water damage
- The foundation level and any known cracks, as settling may lead to structural damage
- Plumbing issues, sewer problems, and leaky pipes can cause expensive water damage
- Any irregularities or problems with heating and cooling systems
- Pest infestations, such as cockroaches, rats, ants, termites, or moles
- Roof leaks or missing shingles that can cause water damage during a storm
- Lead paint, which is a common disclosure in home sales and rentals
- Any issues that could affect the property’s title or ownership rights
- Documentation for repairs and insurance claims you’ve made in the past, including materials used and the scope of work
Furthermore, some states require more extensive disclosure of hazard zones, including flood zones, earthquake-prone areas, and other environmental factors that could affect the land. Some states also require disclosure of any violent crimes committed in the property. Even if your state doesn’t require this, it’s a good practice to follow. Consider what you would want to know if you were buying the property for yourself.
Disclosures are designed to provide buyers with as much information as possible about the property before they make a purchase. When you keep something to yourself, a minor repair can snowball into a major problem. Many properties have issues that come up during inspections that the seller wasn’t aware of. Imagine having to lower your asking price because of a defect you weren’t aware of.
Your property is a complex machine with many parts, and many sellers choose to have it inspected prior to sale. This enables them to make any necessary repairs beforehand, reducing the buyer’s bargaining power. An inspection also demonstrates good faith on the seller’s part, indicating that they want the property to be in the best possible condition before it is sold.
Disclosure requirements vary from state to state, so consult with your agent, attorney, or broker to obtain a checklist that covers the specific requirements for your state. Review the list carefully and include as many detailed notes as possible, including dates of upgrades and repairs. Fill out the disclosure form as completely and honestly as possible. If you have questions, it’s best to consult with a lawyer rather than your agent, who may be hesitant to provide legal advice outside of their area of expertise.
Remember, being dishonest in your disclosures can result in legal action, costly repairs, punitive damages, and even rescinded sales. Make sure you work with a trusted professional to guide you through the disclosure process.
Remember, YOU CAN GET SUED for being dishonest.
And if you are found liable, you will need to pay for repairs, legal expenses, punitive damages and in some cases, the sale can be rescinded. Make sure you are working with a trusted professional to help guide you through real estate disclosures.