To Disclose or Not to Disclose
This can be a touchy subject for all involved as the sellers’ disclosure of the actual condition of their home is required to be truthful and accurate. But, many sellers are ultimately afraid of the entire disclosure process. While laws vary from state to state with regards to seller disclosure, for the most part, they all require the seller (in one way or another) to disclose all ‘known’ conditions of the home. So, when in doubt about an issue . . . . . disclose, disclose, disclose.
When a buyer is looking at a home, they only see the top layer of the home. But, they have to look past the seller’s furnishings and décor as they don’t know the full history of the home. Such as if the home has ever flooded, when the water heater was replaced (or if it has ever been replaced), if the roof is in need of repairs, etc. Thus, when a seller goes to put their home on the market they will be given a property condition statement/ report by their broker to disclose specific information related to the home.
Seller’s Statement of Property Condition
By law, a seller must disclose all known material defects when filling out the Seller’s Statement of Property Condition that is available from the Massachusetts Association of Realtors®. As a seller, you are required to state what you know about the property in a truthful manner. Everything from appliances, title/zoning information, property encroachments and structural improvements made to the property are all part of the questionnaire.
If it is an older home (built prior to 1978), lead paint may also be an issue and should be disclosed at the time of sale (and must be removed in some states). This is done through the Property Transfer Lead Paint Notification (we covered a more in-depth information on lead-paint in homes on a past blog entry that you can access by clicking here).
Buyers Take Note
It is always a good idea to employ a professional home inspection to make sure the full property condition is known. It is also helpful to get an unbiased, professional opinion on the overall state of the property. While laws vary from state to state, there are federal laws in place that regulate the use of a seller disclosure when selling real property. If you are interested in a property, then ask to see the seller disclosure form.
Sometimes, home inspections will bring up issues not even known to the seller. That is why it is important to have a qualified individual look over everything and ensure that it is up to code and in proper working condition.
Sellers Take Note
As a seller (or potential seller), if you believe there may be issues that may come up in a home inspection report, then you may want to have a home inspection completed prior to the time you put your house on the market. By having a home inspection done early in the process, you can budget for necessary repairs and have them made prior to a buyers’ home inspection. Thus, alleviating the possibility of a buyer re-negotiating a deal with you because of costly repairs or, even worse, walking away from the deal because of the amount and/or type of repairs that need to be made.
As a side note – If you have made larger repairs to the home (or even small for that matter), it never hurts to provide copies of manufacturer warranties, receipts and work orders for the buyer to reference.
Ultimately, because the seller disclosure process is in writing, it is meant to protect the seller and broker/agent as long as everything known is fully disclosed. Everything from water damage, fire, and mold should be fully disclosed, if known. All questions must be answered truthfully and honestly and there is no such thing as too much information in this scenario.
Estate Salewe buy houses, To Disclose Or Not To Disclose