Real Estate Disclosures

Seriously considering putting in an offer on a home or already put one in? Make sure you’ve had a thorough look at the seller’s disclosure statement. In most states, a person selling a home is required to document any known defects with the home for potential buyers, including any current or past problems, in the form of a disclosure statement. You might be familiar with the federal and state laws known as “lemon laws” for protecting consumers from buying defective merchandise like cars, so similarly, home disclosure laws are in place to protect homebuyers.

disclosure for homebuyers

A disclosure is usually documented by the seller and covers all the bases with yes-or-no questions. Each state has different laws about what types of issues must be reported, so ask your real estate agent or check with your local regulatory bureau if you want to find out. For instance, in California, where regulations in general are more strict than other states, sellers must disclose everything from potential environmental hazards to neighbors’ noisy dogs. Along with a report or questionnaire, the seller must include any written records with neighbors, inspectors, contractors, and anything from the previous owner that could negatively impact the value of the home.

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Here’s what a typical disclosure statement may reveal:

  • Renovations, major repairs and upgrades (with or without a permit)
  • Termite problems, whether treated or untreated
  • Basements that easily flood, defective structures, etc.
  • Lead paint (for homes built before 1978, sellers are required to give buyers information about lead from the EPA)
  • Defects in heating/cooling systems, utilities, or appliances
  • Liens
  • Property line disputes or other neighborhood issues
home seller disclosure

Be aware that the seller’s disclosure is NOT a substitute for a thorough home inspection. The seller is only required to report problems they are aware of, and that’s a bit of a gray area, so hiring an inspector is still advisable for protecting yourself against unwanted problems with a house. The disclosure is simply there as an official record and to make you aware of any known issues up front (though in some markets you may receive the disclosure statement after you’ve put in an offer).

The good thing about receiving a seller’s disclosure up front is that you can try to negotiate with the seller. If any of the defects seem major, you can negotiate with the seller to fix them or lower the price, if the price has not already been lowered to account for the defect. Overall, the seller’s disclosure is a helpful piece that can protect you as a consumer by knowing what you’re getting into up front.

Want more homebuying advice? Nestiny is a great place for homebuyer education and to help you gauge how ready you are to buy a home. Journey Homeward allows you to enter all of your wants and needs while the True Affordability Tool will break down your budget, showing what you can comfortably afford. You will also receive a free Ready Report that is personalized based upon the information that you entered. This report will give you a vital head start in the home buying journey, saving you valuable time and money.

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Are you a real estate professional? Go here.

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Ready To Become A Smarter Homebuyer?

By signing up, you agree to Nestiny terms of use.
Are you a real estate professional? Go here.