What you Need to Know About Disclosure

Discloser in regard to house sales is the legal responsibility of the seller or agent to tell any prospective buyers about any defects of the home prior to the sale.

When you are selling a home, if you have an agent that agent is legally bound to disclose any defects regarding the house to potential buyers. When you sell your home yourself, to take the middleman out of the picture and keep all of the profits, you also are legally bound to disclose any information regarding your home. If you do not follow the proper guidelines, you can find yourself in deep water, as you can ultimately be sued for damages. While it does not happen often, there are cases in which a seller has been sued and forced to take the home back.

Real Estate Term Glossary

For this reason, it is very important to understand the elements of disclose to make sure that you follow these by the book. Most states do have mandatory discloser laws. These laws protect a buyer and ensure that they are given any pertinent information regarding defects of the home. The most important element to know is that you are bound to disclose the defects even when not asked. Therefore, if the basement has a leak or floods during rainy season, if they potential buyer does not think to ask about this, you must give them this information, in other words, you must “disclose” it.

Now, one thing to keep in mind is that disclosing information is not necessarily going to make potential buyers go running. Many buyers are interested in properties that need repairs, as they know that the asking price will be lower and this may be just the type of home that they are interested in buying. In addition, unless a home is brand new, most buyers do know that a home cannot be perfect.

While you market your home with an upbeat tone of voice and a pleasant spiel about its benefits and pluses, do take the time to also casually mention its faults. It may help to give a specific example of when a defect affected you and the steps that you took to resolve it. For example, if water does go into your basement during heavy rains let the potential owners know, but then follow up by telling them about how your pump handles it well, perhaps let them know that the pump will be given to them if they do purchase the house and how often to expect such an issue.

Your disclosure can also serve you well in negotiations. If a known issue would cost 3K to resolve and you offer to lower the price by 2K, they buyer may wish to opt for the lower price and perhaps resolve the issue some time down the road or may even opt to fix it themselves.

Your biggest question may be, “what constitutes a disclosure?” It is suggested to have your home inspected. If the inspected finds red flags and you do not have those issues fixed, they would be issues that you should disclose. Be sure to find an experience inspected, as in the end, the responsibility to disclose any home defects will fall on you and not the inspector.