A Lesson for Sellers on Disclosures
September 21, 2016
Sellers may feel hesitant to reveal any minor problems with their home, afraid they’ll scare off buyers. But here’s a warning for your sellers: They may land in legal trouble if they fail to disclose.
Keep It Real
“Most sellers think it is in their best interest to disclose as little as possible,” Rick Davis, a real estate attorney in Kansas, told realtor.com®. “I completely disagree with this sentiment. In the vast majority of cases, disclosing the additional information (especially if it is something that was previously repaired), will not cause a buyer to back out or ask for a price reduction.”
Disclosure laws vary from state to state, and sometimes even on a local level.
“In general, sellers should disclose any known facts about the physical condition of the property, existence of dangerous materials or conditions, lawsuits or pending matters that may affect the value of the property, and any other factors that may influence a buyer’s decision,” according to a recent article at realtor.com®.
This includes disclosing issues that have been previously repaired, Davis says. Also, disclose any inspection reports.
“It is much better to lose a buyer by clearly disclosing all known issues than it is to spend two years and tens of thousands of dollars in litigation,” says Adam Buck, a certified real estate specialist with the Frutkin Law Firm in Arizona.
Rest assured, sellers won’t be put on the hook for failing to disclose issues that they didn’t know about.
They should be careful not to make any guesses when prompted, particularly when it comes to the measurements of the home — one common problem area for disclosures.
“Even if you’ve had an appraiser check out your home, you may have no idea how many square feet it truly is because, as it turns out, there’s no single agreed-upon way to measure a home,” the article states. “Three different appraisers can come up with three different measurements.” Don’t make a guess or buyers can come back and accuse you of misleading them.
Source: “Learn These Basic Rules of Seller Disclosure So You Don’t Get Sued,” realtor.com® (Sept. 20, 2016)
Updated: June 20, 2018