Real estate disclosures come with many questions for both a buyer and seller. Our rule of thumb? Be as open and honest as possible. In our latest post, we will cover what you need to disclose by law.
Being an open and honest seller will not only help you avoid a lawsuit, but it will also make you a trustworthy, stand-up, all-around person. Hiding defects, looming repairs, and any other issues with the home will only come back to bite you in the end. Whether through a lawsuit or good ol’ karma… if you believe in that sort of thing.
Most real estate lawsuits occur because of non-disclosure.
So exactly how much are you required to disclose legally? Basically, anything that can affect the value of the property. Here are just a few of the things you should address:
- Issues with the land, such as drainage, bad soil, and potential for flooding. Bad soil can limit building and low-lying areas can be prone to flooding and water damage.
- Foundation level and known cracks must be disclosed. If the house settles more than it already has, it could experience structural damage.
- Plumbing problems, sewer issues, and leaky pipes all need to be brought to the forefront. Some of the most expensive home repairs stem from water damage.
- Any problems or irregularities with the heating and cooling systems should be addressed.
- If you have a problem with cockroaches, rats, ants, termites or moles, you will need to inform your potential buyer.
- Have a leaky roof or missing shingles? Tell your buyer before they find out during a rainstorm.
- Lead paint is a no-brainer. This disclosure is one of the most common you will see with home sales and rentals.
- Are there issues that will affect the title? Or rightful ownership? This needs to be spelled out up front, not during the closing process.
- You should also have documentation for repairs and insurance claims you’ve made in the past. You should be able to describe what was done and the materials used.
Additionally, some states will require more in-depth disclosure of hazard zones which include flooding, earthquakes and other environmental factors affecting the land. Some states will also require any violent crimes committed in the home be common knowledge. Not every state requires this, but it is a good rule of thumb to follow. Think about what you would want to know if you were buying a home for yourself!
Disclosures help a buyer learn as much as possible about a house before making their purchase.
You are selling a great home right? When you keep something to yourself, a minor, needed repair can snowball in much bigger problems. Many properties have something pop up during the inspection that the seller wasn’t prepared for. Imagine, your asking price slashed because of a defect you were unaware of. Your house is a multi-faceted machine. Many sellers choose to have their home inspected prior to a sale. This allows them to make the necessary repairs ahead of time, lessening potential buyer’s bargaining ability. An inspection will also show good-faith in selling. You are telling the world you want your home to be in the greatest possible condition before it is sold.
Disclosure rules vary state to state. Your agent, attorney or broker will be able to supply you a checklist that covers the requirements for your state. Review the list in its entirety and add as many detailed notes as possible. Don’t forget to include the dates of upgrades and repairs. Fill out the form as honestly and as completely as possible. If you have questions, it is best to talk to a lawyer instead of your agent. Your agent might avoid such questions as they are out of their scope, and they want to lessen their liability.
Remember, YOU CAN GET SUED for being dishonest.
And if you are found liable, you will need to pay for repairs, legal expenses, punitive damages and in some cases, the sale can be rescinded. Make sure you are working with a trusted professional to help guide you through real estate disclosures.
Are you selling your home in Chicago? If you have questions, we have answers! Fill out this form, or give our office a call now! (630) 984-0000