Presenting a Seller’s Disclosure as a legal document
A Seller’s Disclosure is a document outlining the features, known issues or remodeling projects that have occurred in the home during the home owner’s occupancy. This document is then made available to potential buyers interested in the property. By making it available, it gives the Seller’s Disclosure its purpose. It is a way for any potential buyers to learn about the property in more detail, as well as the seller’s experience within the home. A Seller’s Disclosure is required by law, and should be completed to the best of one’s ability without guessing.
Examples of What to Disclose:
⦁ Structural and foundation problem
⦁ Lead paint, asbestos, or toxic mold
⦁ Pests and wood destroying insects (WDI), such as termites
⦁ Fire and safety hazards
⦁ Toxins within the local water supply or soil
⦁ Pending lawsuits that may affect the value of the property
Now, it is understandable that there will be some questions on the disclosure that you do not have the answer to. Not every home owner knows whether or not their home has urea-formaldehyde insulation, or if there are dead trees located somewhere on the property, or if the house has had remediation of environmental hazards in its past. Some times, it can be shocking what one does not know about the home they live in. Though, it is important and lawful to disclose everything that you do know, as you can be penalized for non-disclosure. Penalties for non-disclosure can include major fines and potential lawsuits from the homebuyer. If you fail to even provide a Seller’s Disclosure, the buyer can terminate the contract at any point, retain their earnest money, and walk away- even out of the option period. Non-disclosure, and the failure to provide, is a just cause for the buyer to walk away, at any point. To reiterate this, you can be sitting at closing and the buyer get up and walk out, lawfully. That is how important this document is. To protect yourself, and those looking to buy your home, disclose anything and everything that you do know about the home.
There are some myths revolving around disclosures. The most common one: Is it required for a homebuyer to be made aware of any deaths on the property? The answer can vary by state: The seller is usually only required to disclose deaths on the property that were not caused by: suicide, natural causes, or accident not related to the condition of the property. Another would be that a disclosure scares off buyers. This is a flawed idea. There is no evidence to substantiate that a disclosure of a death will scare off buyers. Think of it this way, if there was a problem big enough to scare away a buyer just by reading the disclosure, the problem would be big enough to scare off a buyer without it. Probably one of the worst myths surrounding a Seller’s Disclosure is that it holds the same weight as an inspection. A Seller’s Disclosure is not a substitute for an inspection. It is not, and will not, ever be the same as an inspection. An inspection is a thorough investigation completed by a professional.
In order for sellers to fulfill their legal obligation to any potential buyers, and protect themselves, complete the Seller’s Disclosure as soon as you can and make it available. Curl up on the couch while watching television one night, and just knock it out. The Seller’s Disclosure is used to give detail about the property and the seller’s experience living there. There is no reason to not provide it and, ultimately, it will makes the real estate transaction a smoother process.