About Sellers’ Disclosures
Buyer beware - what you see is what you get. Sellers should beware, too. State and federal laws require sellers to be truthful about the condition of their homes that may not be obvious to potential buyers.
According to Quickenloans.com, these disclosures include repairs that have been made; needed repairs; property defects such as foundation problems; threats to homeowner safety such as lead paint, asbestos, or mold; a location prone to floods or earthquakes; missing essentials such as an oven or fireplace key; land-use restrictions including easements and zoning; neighborhood issues such as nearby sources of noise or odors, and homeowner association covenants, if applicable. Sellers must also disclose stigmas that could upset buyers, such as deaths that have occurred on the property.
The Real Estate Disclosure Statement, Property Condition Disclosure, or Condition Report is required by the federal government to disclose the presence of lead paint, and many states such as Illinois and California require seller disclosures concerning radon, a colorless, odorless gas believed to cause cancer.
State real estate laws enforce sellers’ disclosures and each state is different, according to the disclosure laws assembled by Homelight.com. Some states allow sellers to disclaim disclosures, but they must do so in writing, and even then, they must disclose material defects they know of. Sellers may sign a form that says something like “the owner of the real property makes no representations or warranties as to the condition of the real property and the purchaser will be receiving the property as is with all defects which may exist.” And then they must fill out a federal and/or state-mandated disclosure form.
While the forms may ask sellers to disclose whether or not they know of lead paint or radon present, they aren’t usually required to do tests to determine the presence of toxic chemicals. But the buyer’s lender can always require proof of tests and/or remediation for any problem that has been disclosed, including fire and water damage.
Your Berkshire Hathaway HomeServices network professional will provide the mandated disclosure documents you’ll need to sell your home, or if you’re a buyer, you should receive the seller’s disclosure as required by state law, certainly no later than three to five days after your offer is accepted. Many agents provide a copy of the disclosure to interested buyers, so they can get an idea of the home’s condition before they make an offer or order an inspection.
Sellers need to answer every question truthfully. While disclosure forms typically allow you to check the “I don’t know” box, you should only do so if you truly don’t know the condition of a certain appliance or system.
The best way to feel confident about the condition of your home is to have your home inspected by a licensed professional home inspector. Your real estate professional can recommend someone or provide you with a list. For a few hundred dollars and a few hours of your time, you can follow along during the inspection. You’ll either find that your home is market-ready, or the inspector will bring a problem to your attention that you can fix.
When you disclose a problem to the buyer that has been fixed, be sure to provide a copy of receipts and invoices. If the problem hasn’t been fixed, expect the buyer to either ask you to fix it, or to offer a little less for the home.
Remember, homes in the best condition sell the fastest and for the best prices.