What You Should Know About Real Estate Disclosures

When you’re buying a home, a seller is required to share some details about the house. Some details you might be able to notice without a seller’s disclosure, and some you may have missed when touring the house. You should know when a house has problems, whether you can see them or not. 

Without a seller’s disclosure, you could inherit major home issues without ever knowing it. Here’s what a real estate disclosure can include and what you should look out for when reviewing one.

What Is A Real Estate Disclosure?

A real estate disclosure is a document that details the condition of a seller’s home. The point of the seller’s disclosure is to make sure the buyer understands what the seller knows about the home. For example, if the roof was replaced when the current sellers were living in the home, that information would be in the disclosure form.

Seller’s disclosures are to inform buyers of what they could potentially inherit in a home, but they also serve another purpose: They’re meant to protect the seller from any future legal action. If the buyer takes over a home knowing about something they saw in the real estate disclosure, they can’t later sue the seller if something goes wrong.

What Does A Seller Have To Disclose In A Real Estate Disclosure?

Most property disclosures include details about the property in many different forms, including:

• The structure and appliances of the home: You’ll see details about the structure of a home, including the ceilings, foundation, walls and windows. You’ll also learn about any damage to major appliances in the home, like heating and cooling systems, electrical units and even the sprinkler system, if applicable.
• Termites and pests: If there have been any wood-destroying attacks on the home, like termites, fungi or other pests, the seller needs to share their awareness.
• Flooding: As a buyer, you have the right to know if the home has ever had any water intrusion, drainage or flooding problems. You’ll also learn if the home is in a flood hazard area and if the property requires flood insurance (not all properties do).
• Plumbing: Discover the type of drinking water source your potential future home has (like public, private or well, for example). Also learn if there have been any defects to the water system (or systems) or plumbing leaks for as long as the owner has had the property.
• Roof: The seller is required to share if they are aware of any roof-related issues, including leaks, repairs, replacements or anything else. The owner is also required to disclose the age of the roof.
• Sinkholes: You might learn that a home could have had settling or sinkhole issues – sometimes it’s not the house you’re looking to buy but homes near it.
• Homeowner information: A seller is required to share information about the homeowner’s association requirements or other similar membership requirements for buying a home. You’ll also learn about any boundary or access road concerns. For instance, if the property you’re looking to buy shares any walls, fences or features with adjoining properties.
• Environmental concerns: Homes built before 1978 are legally required to give potential buyers disclosures about lead-based paint. You’ll also learn about other types of environmental hazards, like asbestos, mold, defective drywall, contaminated soil and other concerns.
• Governmental claims: Sellers are required to disclose administrative claims against the property as well as any claims brought up from municipal or county assessments. If the seller knows of any litigation or claim, the buyer has a right to know it as well. The seller is required to share information about permits pulled on the home, whether by them or previous owners.

Seller’s disclosures can vary based on where you live. Different laws exist at the state and local level. You might have other disclosure information included in yours that isn’t listed here. 

How Do I Find Out About Home Disclosures?

Since disclosures are different by state, county and jurisdiction, you may need to pay the city office a visit. When you visit your city’s building services department, you’ll learn about records, permits and build inspections for your potential home.

You can also ask your real estate agent or attorney for the home disclosure. The seller’s agent or attorney should have a copy of the real estate disclosure for you after an offer to buy the home is agreed upon by both parties.

A disclosure is not the same as a home inspection. A disclosure is a form provided by the seller detailing the seller’s best knowledge about their home and any potential issues. A home inspection is done by a licensed professional that checks every area of the home. Those areas are included in a home disclosure, but issues might be found that a seller either didn’t know about or didn’t share in the disclosure form. If a seller deliberately hides information about defects in the property, you as a buyer have a right to legal action.

A home inspection might reveal issues that need to be addressed before a buyer can close on a home. For instance, outdated electrical panels may require the seller to replace the unit in order for the seller can get home insurance. Structural issues, including the roof, might require the seller to pay for updates or repairs before going through with a home closing. This might push back the potential closing date. But without home insurance, you may not be able to buy the home. A disclosure paired with a home inspection can be the determining factors in getting the best house for you.If you’re looking to sell your home and want to make sure you have the proper paperwork in place, use our tools to get started. If you’re considering selling your home by yourself, it’s important to make sure you have what you need ready to go. Real estate forms, including a seller’s disclosure and a lead paint disclosure, are great starting points.