Disclosures are a key part of selling your home. The prospective buyer should have some reasonable assurance that the home they are getting is a valuable one, with no ticking time bombs lurking that will land them with a lot of expensive repairs.
Honesty Is the Best Policy
Most smart sellers will spruce up their home with a fresh coat of paint and perform any minor repairs before they put their home on the market. However, some unscrupulous people will make cosmetic changes with a view to hiding something more serious, in the hope of making the sale and tricking the buyer.
This is short-sighted, because the house will need to be appraised and inspected, and any decent real estate appraiser and home inspector knows all the tricks. The sale could fall through, so why risk it? Therefore, it’s best to disclose and work out who will repair what, rather than trying to hide the condition of the home.
Real Estate Disclosures
Real estate disclosure statements are the buyer’s opportunity to learn as much as they can about the property and the seller’s chance to give an idea of what it will be like to live in that house.
Potential seller disclosures range from knowledge of dry rot or leaky windows, to work done without a permit, to information about a major construction project nearby that might affect the price of housing and the quality of living in that area.
Disclosure documents inform buyers and also protect sellers from future legal action. Disclosures are the chance for the seller to reveal anything that can negatively affect the value, usefulness or enjoyment of the home.
Varying Disclosure Laws
Disclosure laws vary from state to state, and in some cases, city and county. Some are stricter than others. In general, disclosure laws requires that sellers, and their agents, complete or sign off on a wide range of documents. These will include a Natural Hazards Disclosure Statement, Local and State Transfer Disclosure Statements, Advisories about Market Conditions and more.
These are usually boilerplate forms that have been written by the local or state real estate association and are most often a series of yes/no questions about the home the seller is putting on the market, and their experience of living there.
The seller completes a Sellers Property Questionnaire where they will disclose previous improvements, renovations or upgrades, if pets where present in the home, and details of the homes condition. Other standard disclosures include termites, water heater, lead based paint, and others.
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