Seller’s Disclosures and Real Estate Transactions

If you are buying or selling a house one of the important documents in that transaction is the seller’s disclosure. What is a seller’s disclosure and why is it so crucial?

Laws vary from state to state but all require a seller to reveal to the buyer any known issues with the property. This could include repairs, renovations, past or current problems, even neighborhood issues like noise or proximity to nearby construction.

What Is a Seller’s Disclosure and Why Should I Get Legal Advice

As a buyer you would want to know that any modifications to the property were done correctly and if permits were required and acquired. The disclosure statement helps to protect the buyer from hidden problems that could reduce their enjoyment or use of the house. This is a legal agreement, so a dishonest seller who does not disclose known issues to the buyer can be held financially liable long after the house is sold. This is one important reason you should consult our experienced real estate attorneys when buying or selling a home. The disclosure statement is protection from future legal action on the part of the buyer and it can even protect and benefit the seller when done correctly.

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If you buy a house and discover a problem, how can you tell whether the owner knew about it? And even if you’re sure the owner knew about it and neglected to put it on the disclosure statement, could you prove so in court? And if you think your case is strong and you could prove so, would you be willing to actually file a lawsuit, and would you have the money to do so? The moral here is that while the disclosure gives you some protection, don’t make the mistake of thinking that it provides you with ironclad, 100% protection against undisclosed problems with the house.

Disclosure Statements Aren’t Foolproof, So It’s Wise to Consult an Attorney

The disclosure statement is not foolproof and is no replacement for a thorough inspection by a licensed real estate inspector and sound legal advice throughout the process. Your inspector will examine the house and furnish the buyer with a complete list of any defects in the home or code violations that need to be remedied. Also, the seller is not required to reveal issues that are unknown to him or her. This is merely common sense.

It’s standard practice in real estate to give a home a fresh coat of paint before putting it on the market. Nine out of 10 times, the intention is to show the property at its best. But every so often, the seller paints the house in hopes of covering something up.

Examples of Seller Disclosure issues include:

  • Structural, Electrical, or Plumbing Issues
  • Lead Paint, Radon, Asbestos, or Toxic Mold
  • Pests, Termites, or Wood-Destroying Insects
  • Flood or Wildfire Danger
  • Toxins in the Local Soil or Water
  • Water Rights

If there are repair issues that the seller does not wish to undertake, the buyer may wish to negotiate a better price or consider purchasing a different property.

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When Does the Buyer Receive Seller’s Disclosure Statements?

In most areas, disclosure documents are given to buyers once the seller has accepted their offer. Along with their inspections or loan contingency, the buyer can review the seller’s disclosures. If the buyer finds something negative about the property through disclosure, she/he can usually back out.

In some states, sellers furnish disclosures even before an offer. Letting buyers know everything they need to know up front saves everyone time, hassle and expense by preventing deals from falling apart once they’re in escrow.

Buyers must sign off on all disclosures and reports. So it’s vital to review them thoroughly and ask questions if necessary. We can help you with the proper questions and to sign off safely. Providing full disclosure up front can help a seller to earn your trust. By laying their cards out, sellers can give buyers a sense of comfort or peace of mind, making their home more desirable than a competing one.

Given the potentially serious ramifications of a disclosure document, it is very smart to consult with a qualified real estate attorney in these matters. This is one time it’s always worth spending the money for expertise and the extra protection it provides.

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