In real estate, seller disclosure is the buyer’s opportunity to learn as much about the property as they can from the seller before purchasing it. The disclosure documents can be made up of several forms that provide information about the property.
The California Association of Realtors publishes a number of different disclosure forms for buyers that outline the property in detail. One of the documents is a Transfer Disclosure Statement questionnaire that seller fill out. Sellers must also complete the Natural Hazard Disclosure Statement to identify any potential natural hazards the seller is aware of, such as property on an earthquake fault zone.
What to disclose?
When selling a home, the seller is supposed to report any known defects about a home during the selling process. This can include the age and functionality of major appliances and information about plumbing and heating systems. Also taken into account are structural elements such as the roof and foundation. Also, in California, a seller must notify the buyer if a death occurred on the property within the last three years as a death in the home may discourage some potential buyers.
Aside from any visible defects, the seller is responsible for disclosing any latent defects such as mold, lead based paint or prior flooding. The seller has a responsibility to disclose any information about something that could pose a threat to the health or safety of the buyer.
Home inspections verses seller disclosures
Seller disclosure information is not a substitute for a home inspection and buyers should always have a full property inspection performed before purchasing a property. A seller can legitimately be unaware of a serious problem, leaving the buyer trapped in a bad purchase. No matter the age of the home, a home inspection can be informational.
When purchasing a home, don’t get lulled into a false sense of security by a new coat of paint or shiny hardwood floors. Request a home inspection to understand drawbacks to your dream home. As a seller, make sure to report any known issues to prevent a potential lawsuit later on down the line. Most buyers are open to less than positive information about the property, but they prefer to know about it in advance of the purchase.