Sellers are often required to list out all the physical aspects of their property to prospective home buyers. This increases clarity and facilitates a better sale. That is exactly where a seller disclosure statement comes into the picture.
Sometimes to make a quick and easy sale, sellers tend to disguise the defects in the house. However, if the buyer finds material defects later, the seller may face legal consequences. To avoid these, our guide will take you through seller disclosure New Mexico.
What are Seller Disclosures?
The Seller Disclosure form is a standard checklist form containing material defects and features of the property. It specifically provides information about the property that may negatively affect the value of the house.
If there are material defects in a property that may impact the value of the property and the seller is aware of them, then the seller must disclose them. However, sellers should report these defects to the best of their knowledge and understanding.
The aim of Seller Disclosure is to maintain transparency in the real – estate transaction to keep the buyer aware of any defects present in the house.
Importance of Seller Disclosures
Seller’s disclosures serve the following purpose in real estate transactions:
|🔎||Give Complete Information About The Property||Disclosures help communicate the defects present on the property. They ensure that all the stakeholders involved in the transaction are well aware of the property's history.|
|⚖️||Protects Sellers Against Legal Liabilities||Once you disclose all the known defects present in the house or which come to light during the inspection, you may be exempted from any future liability against those defects.|
|👍||Develops Credibility||Honesty, accuracy and transparency are of utmost importance when selling your house. Disclosures are a way of achieving all of these and thereby enhancing your credibility.|
New Mexico Seller Disclosure Law
The sellers in New Mexico are bound by specific federal and state laws in relation to the sale of their property. Set out below are a few pointers revolving around New Mexico seller disclosure laws.
Statute on Seller Disclosure New Mexico
In New Mexico, sellers are mandated by law to make disclosures to prospective buyers. Sellers must disclose material defects in the property in the Seller’s Property Disclosure form. Sellers must make disclosures based on their best knowledge.
Another pertinent seller’s disclosure in New Mexico is related to the tax levied on the seller’s property. As stated in N.M. Stat. § 47-13-4, the buyer’s broker must provide the buyer with the county assessor’s estimate of the amount of tax levied on the seller’s property. The seller must provide these disclosures to the buyer prior to the contractual binding between the Parties.
Disclosure of Material Defects
Apart from stating various characteristics and important aspects of the property and structure, the seller must disclose the latent material defects of the house to the prospective buyer.
- ✍️ Editor’s Note: Latent material defects are the ones which are not apparent or visibly recognizable defects, but they significantly affect the value of the property. Generally, these defects pose a threat to the safety or health of the occupants.
Lead-Based Paint Disclosure New Mexico
Additionally, as mandated under Federal Law, the sellers must disclose if their property (if built prior to 1978) has been coated by lead-based paints. The Lead-based paint disclosure form for the seller should be filled out by the seller.
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Most Common Mistakes By FSBO Home Sellers in Disclosures
The main object of disclosures in any area is to give clarity and perspective to a buyer. Buyers who are looking for a home usually have certain criteria in mind before searching for a home. A seller disclosure acts as a bridge to close these doubts, giving buyers a reason to have faith in you and your deal.
- One of the biggest mistakes a seller can make is not giving disclosures at all. The lack of trust between a buyer and seller can demotivate a buyer from considering your property altogether. Hence, it is suggested that sellers complete all disclosure formalities as soon as possible, even though it may not be legally required in your state.
- Likewise, sellers also get an option to mark a point as ‘unknown’ in disclosures. This gives you ample opportunity to be honest in your disclosures. Also, marking a certain disclosure clause as ‘unknown’ shifts the burden on a buyer to inspect that particular problem. Hence, don’t make the mistake of lying on your disclosures, as that would count as fraudulent misrepresentation and attract a lawsuit.
- Most state laws prescribe that the disclosures should be provided before closing. As an FSBO seller, it is your duty to provide disclosures as soon as possible, since you do not have a real estate agent to do these things for you.
- ✍️ Pro Tip: Sellers who are selling their house the FSBO way are advised to keep their Disclosure Statement ready before listing on the MLS. It increases your credibility and reliability from a buyer’s perspective, as they get an idea of the property’s condition early on.
Tips to Minimize Issues in New Mexico Disclosure Documents
- Review and Verify – There’s a time allowance (some permit 10 days) to review and verify everything about your Purchase and Sales Agreement—also the square footage, home usage, and marketing.
- Ask Questions – Ask questions when in doubt. This would help you in avoiding future trouble.
- Disclose Everything – To avoid problems in your home disclosure statement disclose everything you know honestly. Even a minor issue could turn out to be important.
- Get A Licensed Agent Involved – The best way to avoid disclosure issues is to get a licensed real estate agent who manages and assists in the process.
- ✍️ Pro Tip: List Your Property With Houzeo
One of the best ways to minimize problems in your seller’s disclosure is to Purchase the “Contract to Close Upgrade Package”. A Licensed broker will review your paperwork to make sure it is appropriate. In addition, you should also have the settlement agent review the paperwork so you cover all bases.
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Final Word: Complexity of Seller’s Disclosure in New Mexico
|Level of Complexity||Average|
|Is New Mexico a Caveat Emptor State?||No|
|Is New Mexico a Non-Disclosure State?||No|
Disclosure laws in New Mexico do not follow the rule of ‘caveat emptor,’ i.e. let the buyer beware. Thus, it is the seller’s duty to disclose all material defects or additional disclosures that may affect the monetary value of the house to the prospective buyer.
New Mexico Seller’s Disclosures Statements are a little complicated. Selling your house FSBO is usually good, but then you would have to deal with all the disclosures on your own. This demands that you be aware of all the disclosure requirements and that any mistake can cost you dearly. Houzeo can help you with this.
- ✍️ Editor’s Note: Though selling your home yourself on a For Sale By Owner website can save you thousands in commission, we highly recommend you add a Flat Fee MLS listing to your marketing strategy. Check out the best Flat Fee MLS companies in New Mexico.
By listing your property with Houzeo, you get access to all forms in electronic format. And that too, for FREE! Houzeo has segregated all the disclosures state-wise so that you don’t have to hunt for New Mexico seller disclosures separately.
Check out some of the Houzeo reviews and how it has helped customers around the US.
*Seller disclosures are primarily the responsibility of a home seller. Regardless of the service, you engage in, you are required to ensure seller disclosures provided by you are complete and accurate to your best knowledge. Houzeo is not a brokerage or a licensed agent. It is a tech platform, and the tips presented here should not be construed as advice for which a real estate or attorney license is required.
Frequently Asked Questions
Are seller's disclosures required in New Mexico?
Yes, New Mexico laws mandate sellers make disclosures to the prospective buyer.
Do sellers have to disclose if the house was a site of death or suicide ?
No, sellers are not required to make these disclosures as provided under N.M. Stat. § 47-13-2.
What happens if seller lies on the Disclosure form?
The buyer can take legal action and claim damages against such a seller.
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