Why Are Seller’s Disclosures Important?

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In everyday real estate transactions, whether you are the buyer or seller, there is plenty of paperwork to sign and go through. One of the most important documents is a seller’s disclosure.

What is a seller’s disclosure?

The seller’s disclosure is standard paperwork included in real estate transactions it can also be called the property disclosure. It is a document communicating that homeowners/sellers are legally required to provide future owners/buyers with information about the property.

“This disclosure includes all of the details that may not have been disclosed in the listing or found during a showing that could negatively impact property value. It is important to know what information you are required to include in this disclosure and how it is an essential part of every real estate transaction.” – Scott Statesman, Oahu Realtor®

When homeowners should provide a disclosure

Your disclosure is provided a few days after there’s mutual acceptance of a purchase contract on a home. Some homeowners might choose to disclose information about a home earlier such as in the actual home listing or during home tours before offers are made. Listing agents are required to be transparent with buyers about any issues that the homeowner has communicated about the property.

Many states already have a standard disclosure form that a seller must fill out during real estate transaction paperwork. Some states will allow a more casual disclosure. Before a seller’s disclosure is signed by the buyer they still have the ability to back out of the transaction without any negative impact on them. After it is signed a buyer only has a few days to back out without consequences.

Additional: Common Real Estate and Mortgage Terms

The most common or standard real estate disclosures

Each property is going to be different and each state is going to require different levels of disclosure from a home seller. To know exactly what is expected of you as a home seller it is a good idea to check in with state guidelines or talk it over with a trusted real estate professional.

Most often items that are disclosed about properties include:

Neighborhood issues: this can refer to any noise or unpleasant occurrences common within the surrounding properties of the home for sale that could possibly cause a negative environment for the homeowner.

Safety hazards: this can refer to any contamination like lead paint, radon, asbestos, or toxic mold. As well as communicate if the property is in a higher risk zone for a natural disaster.

Large repairs: this communicates if the property has undergone any major repairs as a result of significant damage to the home structure such as fire restoration or flooding caused by plumbing issues.

Water damage: this communicates if the property has any current damage from excessive amounts of water or if the home is at a higher flood risk

Items not included in sale: this tells the buyer any items that the seller plans to remove from the property when they sell the home. This can include appliances or lighting fixtures or maybe a piece of cabinetry in the kitchen.

Death: all homeowners are required to release any information they are aware of if a death has occurred on the property, if that death has had an impact on the property’s condition, or if there was a violent crime.

When determining what your responsibility is in a seller’s disclosure it is always best to talk items over with your trusted real estate agent. They can help you to decide what should be communicated and what you are legally responsible to communicate to a new owner as well as information that you are not liable to disclose.

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