Full Property Disclosure Benefits Home Sellers
Most people think property disclosures are intended to protect buyers, but making a full property disclosure benefits home sellers as well. When selling a house, providing an accurate disclosure statement benefits both sides in the transaction. An honest disclosure statement will help the seller protect themselves from future legal action and the buyers will have a better understanding of the home they intend to buy.
Before getting started, it’s important to remember, most real estate transactions go quite smoothly and there are rarely any problems with property disclosures. Homeowner’s should NOT stress over creating their property disclosure statement lists.
What the Heck is a Property Disclosure Statement
During the course of selling a home, the seller completes a written disclosure statement informing the buyer of what they know about their property or neighborhood. This might include roof leaks, leaky pipes, mold or any other hazardous condition. It also might include any disputes with neighbors or local construction projects. Using good common sense, the seller should disclose what they know about the property, but they also might be responsible to disclose the not so obvious. After all, in most instances no one knows the home and community better than those persons living there. Although we say, making a full property disclosure benefits home seller, the buyer will benefit the most!
Legalities Surrounding Home Disclosures
First of all, here at the Gregory Real Estate Group, we are realtors, not lawyers. If you are planning a real estate transaction we have the experience and expertise to help guide you through the full property disclosure process, but if you have special conditions or concerns we also advise consulting with a legal professional.
One thing we do know is, anyone can sue another, with or without good reason. Do a Google search for “real estate disputes” and you’ll see for yourself. Just remember, as the seller, you have certain responsibilities and ignorance is no excuse. The bottom line is, if you sell your home and later a problem develops, you could be held responsible. Again, please consult with your attorney to learn of any risks associated with your real estate transaction or disclosure statements.
Now that we have the legalities out of the way, we can share that property disclosure laws do change depending on which state you live in. It’s not just on a state level either, as it could even filter down to the neighborhood level. When it comes to disclosure requirements, the state of California may be the most strict. Home sellers and realtors must complete a plethora of paperwork, including a Natural Hazards Disclosure Statement, Transfer Disclosure Statements, Market Conditions and more. The thing is, this mountain of paperwork is more important than one might expect, so be sure you understand exactly what you are signing BEFORE you sign it.
Research the Neighborhood and HOA
If you’re the buyer or the seller, we encourage you to conduct your own research about the local neighborhood, local HOA, schools and more. Unfortunately, if you’re the seller you’re expected to be aware of what’s going on with your neighbors, local homeowner’s association, schools, etc!
Home Seller’s Disclosure Example: Recently construction had begun on our local Castaic High School, and because this was such a large project and located within a residential neighborhood, sellers were required to disclose the fact that construction was in progress and expected to last a period of time. That’s because of any potential problems the buyer might encounter as a result of the construction. This might include things such as grading, dust, noise, road work, etc. As the home seller, you might think disclosing something like this was absolutely ridiculous, but the state of California takes property disclosure seriously, so you must too!
What Must the Home Seller Share?
The home seller should honestly share any problems of which they are aware, but it goes further. Sure, the list might include, mold issues, a leaky roof, poor landscape drainage, or a crack in the slab, but it could also include problems with neighbors, fence line disputes or just about anything that might impact the value of the property. If selling your home, we encourage you to make your disclosure list as complete as possible. The more thorough the list, the more protection for yourself and your buyer.
Common disclosures might include pets, termites, problems with the HVAC, electrical, plumbing or appliances. Your disclosure papers may also ask sellers if any bankruptcy proceedings or property liens. Certainly, these items would seem obvious but you don’t want to miss anything.
But, I didn’t Know!
What if the home seller was an elderly couple and they had never seen the condition of their concrete slab foundation. After all, the slab had been covered with carpet for as long as they owned the home. So, the couple sells their home, but a few months later while doing a carpet replacement project, the buyer discovers a structural crack in the slab. Now the buyer is upset and accuses the seller of failing to disclose the crack in the slab. What happens next? The seller was honestly unaware of the problem, and of course it didn’t turn up during the home inspection. Who’s responsible? Unfortunately, we cannot answer this question. It’s most likely the home sellers will never hear about this. The buyer will fix the crack, install the carpet and move on. On the other hand, this could turn into a legal action.
Will a Home Inspection Help
It’s always a good idea for home buyers to obtain a home inspection but this is not a Disclosure Statement. Certainly the home inspection could result in the discovery of previously unknown deficiencies, but in most instances any problems are worked out amicably. A home inspection benefits the buyers most because it enables them to back out of the deal gracefully. Conversely, it benefits the sellers because it might shed light on a problem they were previously unaware and protect them from problems in the future.
Use Common Sense When Making Property Disclosures
By requiring home sellers to make a disclosure statement, regulators are hoping to protect unsuspecting home buyers from being taken advantage of. There is a long history real estate transactions gone bad because of unscrupulous persons taking advantage of another. Our advice on making disclosures is to just be honest! Keep in simple, but be thorough. You can’t disclose what you don’t know, so we also advise obtaining an independent home inspection. Yes, the home inspection is usually for the buyer, but the seller benefits as well. If something pops up during the inspection take care of it, or work it out with your buyer. At least it’s documented and you can show you made a good faith effort to discover any problems you might have not been aware of.
Research Your Buyer
If you’re the seller, you might also want research the character of the of the buyer, before accepting the offer. Unfortunately, there are dishonest people out there looking to take advantage of any situation. Thankfully, we can do a little online investigating to learn about the people we’re dealing with. It wouldn’t be too difficult to learn if someone is the sue happy type.
Here at the Gregory Real Estate Group, we do our homework and research every person we might do business with. Our primary objective is to protect the interests our clients. Next, we want to do our part to protect the real estate industry and our community at large. We enjoy good relationships with many other like minded real estate professionals and look forward to doing business with them. We know, if our buyers are interested in a home listed by an agent for which we’ve had positive working relationships in the past, we know the transaction will go much more smoothly than if working with a non preferred agent. That’s just the way it is.
Contact Local Realtors Matt & Meray
Contact us today and say, “sell my house” and we’ll get right to work! Contact Matt & Meray Gregory. 661-713-4799.
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