Disclosures

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Real Estate

Disclosures

Disclosures are very important on both sides of a real estate transaction. As a seller, there can be legal liability as well as inspection issues and transaction breakdowns when known defects are not properly disclosed. A thorough disclosure statement, presented to potential buyers before or at showings can help when it comes to home inspection and price negotiations. If a counter signed disclosure is collected with each offer, the buyer is essentially saying that they are making their offer knowing the condition of the property, and that their offer price and terms reflect that.  As a buyer, having a detailed and accurate disclosure statement from the seller can be very helpful in making a decision about offer price and terms to help you win, especially in multiple offer situations. 

 If you’re in the process of selling a home, when it comes to disclosures, ten different real estate agents will tell you ten different things. Some will say that it’s not necessary to disclose that someone died on your property. Some will say to disclose every nut that’s been tightened and every faucet drip that’s occurred. The fact is laws govern this very issue. While they vary from state to state, there are federal laws as well, the most notable of which is regarding lead-based paint. The best thing to do, especially if you’ve heard a suggestion that seems too extreme one way or another, is to consult a real estate attorney who knows your state’s disclosure laws.

The general rule of thumb is that anything that lowers the perceived value of the property or anything that would affect the buyer's decision to purchase or the price and terms the buyer offers should be disclosed. Some tips: Answer all questions to the best of your ability. Don’t sweat the small stuff, but make sure you disclose everything that you’d want disclosed to you if you were the buyer. If you don’t know the answer to a question answer “Do Not Know.” But not having precise facts about defects you know exist does not permit you to answer “Do Not Know” to every question. This will always raise a red flag. Just use your common sense and be honest and fair.