With the help of experts including a real estate attorney, we\u2019ve sorted through major points of confusion around the seller\u2019s disclosure so you can help prepare your disclosure packet for buyers with a lot less stress.<\/p>\n In technical terms, your seller’s disclosure should highlight \u201cmaterial facts\u201d or defects. These are issues that could cause someone to change their mind about buying the property \u2014 or valuing it for at least 20% less than what you\u2019re asking, says Brett Wasserman<\/a>, an associate attorney who handles real estate law at the legal offices of Marc Bronstein in Santa Monica, California.<\/p>\n \u201cIf it\u2019s something that you think might change someone\u2019s opinion about whether they might want to buy the property as a whole \u2014 not just the value \u2014 that\u2019s where the line would be,\u201d he says.<\/p>\n So, yes, fess up about that washing machine mishap so you can address how you handled it, just in case the moisture led to any mold.<\/p>\n Small repairs such as patching drywall, as well as little fixes you haven\u2019t done like tighten loose hinges are \u201cimmaterial facts.\u201d In other words, they\u2019re unlikely to affect the buyer\u2019s opinion, Wasserman says.<\/p>\n Plus, a buyer can easily notice them on a walkthrough, so you\u2019re not hiding anything. \u201cGenerally, those things you want to disclose are the things that you can\u2019t see upon a visual inspection,\u201d he adds.<\/p>\n Because seller’s disclosure laws are meant to protect both sides of a home-purchase transaction<\/a>, almost all states have a standard form with questions addressing certain facts, such as the property\u2019s age, the source of its water supply, and the nature of its sanitary sewer system.<\/p>\n Disclosure forms also tend to include information about the previous or current presence of any wood-destroying organisms, such as termites; structural defects, such as a shifting or cracked foundation; and problems with mechanical systems, such as the electrical system, heating or air conditioning.<\/p>\n Federal and state laws may require additional disclosures on separate paperwork. (We\u2019ve gathered the disclosure laws for all 50 states<\/a> so you can see what your state requires.) For instance, federal law \u2014 the Residential Lead-Based Paint Hazard Reduction Act passed in 1992 \u2014 requires the disclosure of any lead-based paint or chipped paint in any housing built before 1978.<\/p>\n Other states require noting the presence of asbestos<\/a>, radon<\/a>, or other chemical substances. Illinois<\/a>, for example, requires that sellers disclose whether anyone on the property manufactured methamphetamines. The drug is made of a variety of volatile chemicals that can permeate carpeting, ceilings, walls, and air ducts.<\/p>\n Still other disclosures address events on the property that don\u2019t affect the physical condition but could apply a stigma or \u201cpsychological impact.\u201d<\/a> In California, if a death happened on the property within the past three years \u2014\u00a0regardless of the cause \u2014\u00a0it needs to be disclosed, Wasserman says. \u201cBeyond that, it has to be disclosed only if the buyer asks.\u201d<\/p>\n You already may want to boast about the new backsplash in the kitchen or carpeting in the den. But unless you needed those repairs to rectify a major problem such as mold or fire damage, you don\u2019t have to disclose the details of every cosmetic upgrade. Just focus on the ones that involve structural changes, such as improving the roof\u2019s ventilation or redoing the electrical outlets or plumbing fixtures.<\/p>\n A property\u2019s zoning is also important to disclose, Bonner says. If you\u2019ve converted a building into a duplex or built an addition, you\u2019ll need to provide proof that you applied for the proper permits or zoning variance. If you didn\u2019t, the buyer might inherit trouble from the zoning authority<\/a> or bad feelings from your neighbors.<\/p>\n Many seller’s disclosure forms include straightforward yes or no questions, such as:<\/p>\n But other questions involve more than a checkbox, our experts say:<\/p>\n Phrasing such as \u201care you aware\u201d does stop some sellers in their tracks (we\u2019ll get to that in a moment). But others simply say \u201cyes\u201d without providing additional information that a buyer reasonably wants to know.<\/p>\n \u201cWith some of the disclosures I’ve seen, the questions that are answered \u2018yes\u2019 are not explained properly,\u201d Bonner says. \u201cThere was one particular disclosure that said that the buyer was going through some kind of a lawsuit. [But] that was never explained.\u201d<\/p>\n If you think that by answering, \u201cYes,\u201d a buyer will want more details, supply them, however minor they might be. That makes the circumstances clearer for the buyer and saves your agent the additional step of relaying the answer.<\/p>\n You\u2019re not expected to check out your home and note every flaw the way a home inspector would. (At this point in the sale process, the home inspection<\/a> is yet to come.) You\u2019re just apprising your agent and potential buyers of what you already know from memory or based on documents such as receipts and warranties.<\/p>\n Some sellers honestly don\u2019t think they should disclose something because they\u2019ve solved the problem. Top-selling Chicago real estate agent Santiago Valdez<\/a> recalled how one homeowner didn\u2019t think to explain that their insurance company had paid to remodel the basement after a sewer line mishap had flooded it two years earlier. The homeowner considered this a one-time incident that had been remedied, but once Valdez asked about it, buyers appreciated the full story.<\/p>\n \u201cThere\u2019s another little wrinkle in there: You can genuinely not know something, but you have a duty to make yourself aware of that circumstance,\u201d Wasserman says. That means you can\u2019t maintain willful ignorance about an obvious issue, such as a leaky roof, then claim you don\u2019t know anything to disclose.<\/p>\n Some states also require you to be upfront about the requirements of any homeowners\u2019 or condominium associations. If you\u2019re not, the buyer doesn\u2019t have to follow through with the contract, says Paul Fonseca<\/a>, a real estate agent for 25 years in the Fort Myers and Naples areas.<\/p>\n Even an as-is sale<\/a> doesn\u2019t let you off the hook from the seller’s disclosure. You may not have to provide a detailed report of the property\u2019s condition, but you\u2019re still expected not to actively conceal anything, which would be fraudulent.<\/p>\n As Wasserman notes,<\/p>\n \u201dYou would want to disclose more than less. You don\u2019t want to give the buyer any reason to turn around and say, \u2018You didn\u2019t tell me about this\u2026 I want X amount back.\u2019\u201d<\/p><\/blockquote>\n If you\u2019re selling property that you\u2019ve inherited or that\u2019s out-of-state, then say that so buyers understand the circumstances and don\u2019t presume you have something to hide.<\/p>\n If you\u2019re a landlord, however, you still have a duty to your tenants to know certain things, Wasserman says. You can\u2019t simply say that you don\u2019t know certain details about the property because you\u2019ve never lived there.<\/p>\n Bonner agrees. \u201cI believe all sellers know something. You may not know every detail if a tenant\u2019s been in the property, and you really haven’t been in there personally. But you’re going to get a contractor to fix something at some point, and they’re going to have to tell you what they fixed. So to flat out say you don’t know anything, that’s a lie.\u201d<\/p>\n If you think revealing something might tank the sale, or that the buyer will be upset if they discover it later, consider your \u201cdisclosure sense\u201d activated. \u201cThe safest thing is, if you have a known material fact, you should 100% disclose it,\u201d Wasserman says. If you don\u2019t, or if you lie about it, \u201cthat\u2019s the equivalent of fraud.\u201d<\/p>\n Your real estate agent can lose their license for willfully misrepresenting the facts, Bonner says.<\/p>\n![\"\"](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/09\/sellers-disclosure-couple-666x381.png\")
<\/a>1. Use common sense <\/b><\/h2>\n
2. Look to your state for guidance<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/09\/sellers-disclosure-remodel-666x381.png\")
<\/a>3.<\/b> Be ready to share your remodeling history<\/b><\/h2>\n
4. Expect a lot of yes\/no checkboxes but elaborate when necessary<\/h2>\n
\n
\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/09\/sellers-disclosure-paper-666x381.png\")
<\/a>5. You can\u2019t disclose what you genuinely don\u2019t know<\/h2>\n
6. If you haven\u2019t lived in the house, the rules change slightly<\/h2>\n
![\"\"](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/09\/sellers-disclosure-court-666x381.png\")
<\/a>7. Lying is not advised \u2014 and illegal<\/h2>\n