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.
Maintaining a stance of transparency and honesty as a seller not only serves as a safeguard against potential legal repercussions but also cultivates a reputation of trustworthiness and integrity. Concealing defects, impending repairs, or any other pertinent issues pertaining to the property ultimately proves to be a self-defeating strategy, as such omissions have a tendency to resurface and exact consequences in the long run. Whether it be through legal actions or the universal principle of karma, adhering to principles of honesty and transparency is not only ethically commendable but also strategically sound in fostering successful and sustainable transactions.
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 building 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.
Moreover, certain states impose more stringent regulations regarding the disclosure of hazard zones, encompassing factors such as flood plains, earthquake-prone areas, and other environmental considerations impacting the property. In addition, some states mandate the disclosure of any incidents involving violent crimes that have occurred within the premises, aiming to ensure transparency and safety for prospective buyers. While not every state necessitates such comprehensive disclosures, adhering to this principle serves as a prudent guideline to uphold. Consider what information would be pertinent to you as a prospective homebuyer, and apply the same standard of transparency and accountability when preparing to sell your own property.
Disclosures help a buyer learn as much as possible about a house before making their purchase.
You are selling a great home right? Failure to address minor, yet essential repairs promptly can precipitate into more significant issues down the line when left unattended. It’s not uncommon for unforeseen issues to arise during the inspection process, catching sellers off guard and potentially leading to a reduction in the asking price due to undisclosed defects. Your home operates as a complex, multifaceted system, and it’s crucial to approach its maintenance and upkeep with diligence and foresight. Many sellers opt to proactively commission a pre-sale home inspection, affording them the opportunity to identify and rectify any deficiencies before the property is listed for sale. By preemptively addressing these issues, sellers can mitigate potential buyers’ bargaining leverage and instill confidence by demonstrating their commitment to selling a property in optimal condition. Undergoing a pre-sale inspection not only serves as a proactive measure to safeguard against unwelcome surprises but also underscores the seller’s genuine intent to facilitate a transparent and seamless transaction.
The regulations regarding disclosure obligations can differ significantly from one state to another. To ensure compliance with the applicable laws in your jurisdiction, it’s advisable to consult with your real estate agent, attorney, or broker, who can furnish you with a comprehensive checklist outlining the specific requirements pertinent to your state. Take the time to thoroughly review the checklist, supplementing it with detailed annotations wherever necessary. Remember to meticulously document the dates of any upgrades or repairs conducted on the property. When completing the disclosure form, prioritize honesty and thoroughness, providing as much information as possible to potential buyers. Should any uncertainties or inquiries arise during this process, it’s prudent to seek guidance from a qualified attorney rather than relying solely on your real estate agent. While agents may be knowledgeable in many aspects of the transaction, legal matters typically fall outside their purview, and they may be inclined to deflect such inquiries to mitigate their own liability risks.
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.