When making a big purchase, like a home, it’s important to know all the facts. Home inspections will give you a pretty good idea of what kind of condition the home is in, but expecting to catch ever imperfection in just a few hours isn’t realistic. Homes are complex structures and you never know what might be hiding in walls, under the floors, or inside the pipes. These details are caught by living in the home for a few years. That’s why it’s standard practice for home sellers to document any known defects and inform buyers of these defects. This process is commonly called a real estate disclosure.
The purpose of a disclosure statement is twofold. First, it’s an opportunity for the buyer to learn about any skeletons hiding in the closet. Secondly, it’s an opportunity for the seller to formally disclose any problems with the house and avoid lawsuits down the road. This serves as a big motivation for sellers to disclose as much as possible.
Flaws and material defects should be at the top of the disclosure list. Things like leaky faucets, busted pipes, bad light fixtures, and things of that nature should be listed. This will allow the buyer to know how much additional money needs to be put into the home to get it up to par.
Broken stuff and shoddy work aren’t the only line items that go into a real estate disclosure. Sellers should also let the buyer know if anyone died in the home, especially if the death was caused by a defect in the home like a busted pool enclosure. Details about the surrounding neighborhood is another category sellers should include. Buyers have a right to know if neighbors are frequently noisy or if the city shuts down the nearby streets for a monthly parade.
There are a few more details that can go into a real estate disclosure depending on state and local laws. The important rule of thumb to remember is that sellers should disclose anything that might affect the quality of life for people living in the home or anything that affects the value of the home.