If you’re selling your home, being upfront with your buyers about problems with your property, such as prior flooding or a defective roof, is required by law and can help lead to smoother negotiations. That’s why full disclosure—a seller’s obligation to disclose known material facts about properties for sale—is critical when it comes to a successful real estate transaction.
Disclosure laws were created to protect buyers, but they also protect sellers. If all of the information about a property is revealed upfront, you're less likely to be involved in disputes and lawsuits after the sale. Your Realtor can answer your questions about disclosure, but here’s some information that can help.
What’s on a disclosure form?
A disclosure form is a notice sellers are required to give would-be buyers on or before the effective date of a real estate contract for sale that addresses the seller’s awareness of defects in the property before the sale.
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For example, if you’ve had termite treatment or damage in the past, that’s something that prospective buyers must know. Or, if the roof has a leak, buyers need to know that, too. There are also federal laws about disclosure. For example, someone selling a home built before 1978 must disclose any known lead-based paint problems.
Intentionally withholding information about a property when you sell can have serious legal ramifications. Talk to your Realtor and make sure you understand your responsibilities. You don’t want to inadvertently leave something out and have to deal with expense, hassles and possible legal consequences later. Also, if you’ve had previous inspections done in the last few years, it might be in your best interest to share a copy of the report with the next prospective buyer.
What to expect from buyers
When you bought your home, you wanted to make a sound decision by gathering as much information as possible about your investment. Your potential buyers will want to do the same thing. Most buyers will hire an inspector to look at your property. The inspector will provide a report to the buyers detailing deficiencies or potential problems.
An inspector might suggest to the buyer to hire a specialist to look into specific elements of your property, such as a structural engineer to examine a potential foundation problem. The buyer and seller can negotiate who pays for these inspections.
A buyer does not have to provide his inspection report to you to negotiate repairs. And even when a buyer shares his inspection report, the buyer cannot force you to make repairs. However, when the buyer provides his inspection report to you, you now have knowledge of information in the report and will have to disclose any material defects to other buyers.
For everyone’s protection
Disclosure is a necessary facet of the real estate transaction, helping to protect both buyers and sellers. If you have questions about disclosure, ask your Realtor for advice.
The Greater Fort Worth Association of Realtors is one of more than 1,400 local boards and associations of Realtors nationwide that comprises the National Association of Realtors. As the nation’s largest trade association, NAR is “The Voice for Real Estate,” representing over one million members involved in all aspects of the real estate industry. The Greater Fort Worth Association of Realtors serves more than 2,700 members by providing MLS services, education, governmental affairs, etc. For more information, visit www.gfwar.org.