✍🏻 Everything you need to know {as a seller} about seller’s disclosures
If you’re putting your home on the market, chances are you’re going to have to fill out a seller’s disclosure. So what is it? And why do you need one?
What is it?
Seller’s disclosures make buyers aware of what they’re getting in a home. You’ll fill out this form before putting your home on the market. It includes any known issues with the home, as well as any upgrades or repair work. This helps buyers evaluate the home, and saves everyone from surprises during the home inspection. The exact forms used and what must be included varies from state to state, but federal law requires you must disclosed lead-based paint and asbestos.
When do you fill it out?
A seller’s disclosure is usually done early in the process of selling a home. Laws and common practices vary from state to state, but in our market, the seller’s disclosure is attached your real estate listing on the MLS.
What is included?
A seller’s disclosure isn’t about a broken screen. It’s about the big stuff that relates to the structural integrity of the home or quality of life. Exactly what must go on it depends on where you live. In general, in most places you’ll want to include the following:
Any permanent defects affecting the home’s structure or systems, like electrical, plumbing, or HVAC
Previous or current issues with the home’s structure or systems
Major repair work completed on the house
Any construction done on the house
Health hazards such as lead paint or asbestos
Environmental issues
Flood danger to the property
Shared property such as driveways and fences
Well or water rights, depending on if the home is in an arid water or doesn’t have a municipal supply
Are there rules to follow?
Yes, most regulations about seller’s disclosures vary by state, your real estate agent can help, or if you’re selling on your own you’ll need to do a little research.
How honest should you be?
Be very honest! While it may seem scary or counter-intuitive, a very detailed seller disclosure can become a selling point—and it can save you time and risk. Definitely include anything a home inspector could find. If the inspector uncovers issues that aren’t in your seller disclosure, it could risk your entire sale—not only do surprises work against you in negotiations, but they can make a buyer lose trust in you. The buyer may start to wonder what else you’ve been hiding.
When does the buyer receive the seller’s disclosure?
In our market we provide these disclosures to the buyers before an offer. Smart sellers let buyers know everything they need to know up front. It’s smart because it saves everyone time, hassle and expense by preventing deals from falling apart once they’re in escrow.
How does it help you as a seller?
Once you’ve closed, a buyer could try to hold you legally responsible for any issues they find that weren’t on the seller disclosure.
For example, if a buyer claims after closing that he didn’t know about previous termite damage, the sellers can point to Section 3 of the notice where they indicated the termite damage—assuming the seller’s filled out the notice correctly.
Bottom Line:
Home sellers are often nervous about how their home’s flaws will affect the sale, but here’s the thing: no home is perfect. In fact, homes on the market typically come with a seller’s disclosure explaining all of their issues. A seller disclosure ensures the buyer knows what they’re getting in a home, and they protect sellers, too.