Disclosing all known defects about your home, no matter how trivial, is your best defense
against any potential legal problems down the road. In some cases what you must
disclose is outlined by the state, in other cases disclosure requirements are specified as
those defects to your property that a buyer can reasonably expect you to be aware of,
particularly if you live in the house.
Seller disclosure obligations vary from state to state, so it’s best to work with a Realtor
who can guide you through the disclosure process. While it’s critically important that to
make your best effort to fully disclose everything you know about the property, just
because you’re selling your house doesn’t make you and all of your personal information
an open book. Check with your Realtor to learn about the type of information that isn’t
considered to be a material fact.
Generally most state-mandated disclosure laws require that you provide to the best of
your knowledge written disclosure of all known material facts that may affect a
homebuyer's decision to buy the property, including those facts that may affect the price
they are willing to pay for the property . A material fact can include a fact about the
house, its condition and or any related legal issues that could negatively impact the
Common problems and defects include information about the general condition of the
home, physical defects (a basement that’s prone to flooding or a leaky roof), legal
problems (whether the new bathroom is up to code and permitted), pest or fungus
damage, and relevant environmental or seismic hazards. Items you’re likely to find on
the required disclosure form include:
Structural issues, including code violations or a cracked foundation.
- Geological issues, including whether the home is situated in an area prone to
flooding, landslides or earthquakes, or if the home is built on expansive or
- Environmental issues, including whether the home is situated near an airport,
landfill, or some other undesirable facility; any mold or mildew problems.
- Operating condition of any built-in appliances or other appliances included in the
- The overall conditions of the property’s plumbing and electrical systems, age of
roof and its components, and any other major systems including sewer and septic
- Information about homeowners insurance claims that have been filed within the
past five years.
Leave nothing out and mitigate the potential for post-closing issues that could blow-up
into an expensive lawsuit. Being completely honest about any potential or current
problems may motivate the homebuyer to ask for a price reduction, an allowance for
repairs or that the actual repairs are completed prior to settlement. While no home seller
wants to deal with these issues, it’s unlikely that any seller can avoid providing some
negative disclosure information because no house is perfect or without problems.
Consider obtaining a pre-sale home inspection. The extra set of eyes will provide you
with more information about your property’s condition, and presenting the homebuyer
with an inspection report in addition to your disclosure forms will strengthen your
position as an informed and cooperative home seller who’s made the best effort possible
to fulfill disclosure requirements.