The paperwork

D - Seller Home Disclosure: Is a property disclosure necessary?

Disclose, disclose, disclose: 

In most states, a seller is legally required to complete a residential disclosure questionnaire covering property related issues. If one is not required, you should still disclose any serious defects, otherwise you’re opening yourself up to a potential lawsuit. The days of “let the buyer beware” disappeared during the last century.

The National Association of Realtors strongly encourages its member agents to have the sellers disclose any problems related to the property. Disclosure has proven to cut down on lawsuits brought by disgruntled buyers. 

Disclosure considerations: 

Most states don’t require disclosure of problems that have been repaired while others insist that you disclose a condition that was a problem even though it has been fixed. Read over your mandatory disclosure forms for the laws in your area. If there is any question as to the need for a state or local disclosure (very rare), call a local real estate office, attorney, or your city-planning department about disclosures and local ordinances that affect your sale. 

Some states do not require a disclosure for property being sold as an estate or one in which the seller never occupied the home. Check with your attorney.    

Incidentally, real estate agents will not advise you (as legal matter, they shouldn’t advise you) on how to actually fill out a seller disclosure form since it would greatly increase their liability. 

These mandatory disclosure forms can be obtained from consumer friendly title companies, any real estate office, many attorneys have them, and many states make them available online.

Select the Member Home link at the bottom of this page. Select the state where your property is located. Information on your state, including a link (if available) has been set up to obtain a seller disclosure.  

Have your disclosure prepared and available ahead of any showings. They can usually be provided to the buyers after the contract is signed (depending upon state law). However, this could provide a legal out for buyers should the disclosures reveal a condition that is unsatisfactory to them. Problems are much more acceptable to buyers when they are disclosed before a contract has been negotiated. 

Federal disclosure:

If your home was built prior to 1978, federal law states that you must complete a disclosure about lead based paint on your property even if you have no knowledge of such. You can obtain the official Seller’s Disclosure of Information on Lead Based Paint form from the federal government at epa.gov (look under Forms and Instructions for the Sample Form for a Seller's Disclosure) or by calling 1-800- 424-5323.

During negotiations, buyers may specify, at buyers' expense, that a test for lead based paint be performed.