If you’re looking to sell your house, be prepared for numerous showings, plenty of cleaning, and lots of paperwork. One piece of paperwork that’s particularly important is your seller’s disclosure statement or form. This document advises buyers of potential issues with your home and can play a crucial role in protecting you from costly legal issues. To help speed up your home selling journey, here’s everything you need to know about creating a seller’s disclosure form.
What is a Seller’s Disclosure Form?
A seller’s disclosure form, often called a property disclosure statement, is a form you fill out that details all the potential problems with your home. Sellers are legally required to produce these statements in most parts of the country. The idea is to protect buyers from purchasing a home with undisclosed problems. But the disclosure form is also extremely important for protecting yourself as the seller from possible lawsuits.
If you fail to disclose a problem you know about and it later causes issues for the new buyer, you could be sued for the price of repairs or more. You could downplay some known issues because you do not see them as major issues, but telling buyers about any issue up front is the best option.
Buyers typically receive the seller’s disclosure form after their offer has been accepted. They will likely review the paperwork with their attorney or real estate agent to see if any of the disclosed issues warrant reconsideration of the deal. It’s possible that a problem may be serious enough to cause the deal to fall through.
State Disclosure Regulations
What you need to include in your seller’s disclosure form is generally based on individual state regulations. This means you’ll have to look up what the law is for your state to make sure your disclosure form meets all the necessary criteria. But there are some federal regulations as well, particularly for lead paint.
A federal lead paint disclosure requirement says that any home built prior to 1978 has to be inspected for lead paint and the results of that inspection disclosed to buyers. Homes built after 1978 aren’t subject to the lead paint requirement, but you’ll still likely have to submit a seller’s disclosure statement in keeping with your state laws.
What Needs to be Disclosed?
As stated above, the exact kinds of issues you need to disclose will be determined by your state laws. But here are some of the more common problems included in seller’s disclosure forms:
- Faulty windows or doors
- Cracked foundation
- Leaky roof
- Problems with appliances
- HVAC issues
- Unpermitted additions/improvement projects
- Water damage (including damage that has been repaired)
- Lead paint or asbestos
- Hazardous conditions (house is in area prone to floods, wildfires, etc.)
- Pest infestations
- Significant repairs made by you or previous owners
- Insurance claims made due to damages
Essentially, if there’s been a significant issue with any of part of the house’s structure, major systems or surrounding infrastructure, it should be disclosed in your seller’s disclosure statement.
Preparing Your Seller’s Disclosure Statement
Some states have a standard disclosure form that you will need to fill out, while others grant some leeway in terms of how you actually communicate your disclosures. But in general, the disclosure statement will need to be made in writing and the language used must be straightforward and honest. In some areas, you may need to hire a real estate attorney to help you prepare the form and ensure legal compliance. In states where an attorney is not required, your real estate agent can help you complete your seller’s disclosure form.
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Nobody wants to admit their home has issues, especially when you’re trying to sell. But by creating a comprehensive seller’s disclosure statement, you not only ensure legal compliance at the point of sale, but you also protect yourself from future legal action. Seller’s disclosure forms are one important piece of the selling process. Making sure it’s handled correctly is key to completing the deal and protecting your family.
Ready to complete all the necessary paperwork and get your home on the market? Register with Homes for Heroes and our specialists will help you through every part of the home selling process while saving you money along the way.