The #1 Guide to Home Sellers Disclosure in 2020 (with Video!)

sellers disclosure

Real estate sellers disclosure laws usually vary from state to state and even county to county. As mandated, the federal law highly requires sellers to disclose certain defects and information such as water damage, hazardous toxic waste, asbestos, lead-based paint, etc., just to name a few. If the property has material defects mentioned in the form, you may be required to disclose these details to the buyer.

Notably, it’s never easy to assume a property’s every potential issue —either these are major or minor defects. That’s why the seller disclosure’s purpose is to provide a detailed picture and features of your home’s current condition. So home buyers, for instance, can know if the house needs to be repaired or has material defects that could cause major problems in the long run. In other words, the sellers disclosure is some sort of protection for buyers against a condition that might affect the property’s value.

Sure, you have a lot of questions about sellers disclosure such as “Is it your responsibility to perform a home inspection to verify the defect?” What are the things you must disclose?”, “Do you have to notify the buyer of a supernatural phenomenon in your house? How about death? Or such as disease?” These are some of the questions that need full answers. And here, we’re going to tackle them one by one. Here’s a guide to home seller’s disclosure you should definitely know.


Did you know Houzeo’s Gold Plan provides relevant Federal and State Seller Disclosures?

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What is a seller’s disclosure?

A seller’s disclosure statement form is a standard checklist form containing material defects and features of the property. Remember, every state has a different seller’s disclosure law. So, it’s advisable to review the form with your agent or lawyer about the statutes in your state. Usually, the disclosure form is completed along with the listing paperwork—especially in Multiple Listing Service (MLS) provided by the listing agent.

Note that the sellers disclosure form is not a kind of replacement for a home inspection nor an insurance document. As a matter of fact, sellers are only obliged to disclose property defects that they are aware of. And it’s solely the buyer’s responsibility to conduct a home inspection to gather lacking information or verify the defects. However, sellers should report the defects to the best of their knowledge and in good faith. If found guilty in fraud and misleading acts, this will lead to termination of the purchase and sale contract. What’s worst, the seller could face serious legal trouble in return. From pest infestation to legal pending issues, sellers should disclose any known information to avoid future disputes.

What are the essential sellers disclosure you have to disclose?

Although the content of the seller disclosure form entirely depends on the state, there are basic and vital disclosure most states include in their form. For buyers, these are the crucial information you have to review and double-check. And for sellers—if you’re new in selling your home or now an experienced seller—these are property defects you have to pay attention and must include in the form.

Title Violations (Encroachments, Easements, etc.)

Double-check if the seller is the sole owner of the property. The seller should provide complete rights, together with the title documents, to the property to avoid legal disputes or claim ownerships. Either pending or current, there’s a need to disclose legal claims against your property that could affect the transaction. These are title issues that include zoning issues, covenants, boundary disputes, and assessments.

Structural Condition of the Property

Homebuyers must be aware of the structural state of the property. Also, any known improvements or repairs must be notified to the new owner. Ask for permits and inspect if it’s up to code. Structural features mostly involve rook leaks, basement flood, dry rot, or attic insulation. Other material defects, likewise, such as chimneys, pools, garage floors, fireplaces, exterior walls, elevators, sidings, slab floors, etc. are included in the seller disclosure form.

In order to verify the disclosure made by the seller, buyers can hire a home inspector to make sure the property has a safe foundation. Pest infestations (from wood-destroying insects) and dry rot could affect the property’s structural stability.  

Water Source, Well, or Irrigation System

The property must have a clean water source; any irrigation options or sprinkler system should also be running and in a good condition. Check if there are any water pressure problems and if water pipes are working perfectly. Home sellers should also inform if there are any wells on the property, and notify whether they are sealed or currently not in use.

Electrical, Heating, and Plumbing Systems

Make sure the buyer is notified about past or present electrical issues. Examine if the breakers are still functional. For buyers, ask certifications/permits to the seller to authenticate the system’s condition. Other things may include appliances, internet, cable, air conditioning, telephone, alternate power systems, sauna, pump, etc.

Water Heater System and HVAC

Inspect how old the water and gas water heaters. To give you an idea, water heaters typically last for about 10 to 13 years, while electric or gas water heaters could last for about 8 to 12 years. Both the Heating and HVAC systems should be maintained enough and should be replaced if necessary. It’s advisable to ask or include how long the system is running to estimate the duration of its functionality.

Federal Lead Disclosure Requirements

Houses built before 1978 are required by law to complete a lead-based paint disclosure. The sellers disclosure goal is to protect the buyer from any lead paint that could harm occupants from lead poisoning. Every seller must notify the new homeowner from any present or past exposure to lead. The seller must also provide an EPA pamphlet called “Protect Your Family from Lead in Your Home.”

The EPA pamphlet contains in-depth information on “health effects of lead, how to identify lead-based paint hazards, and how to reduce or eliminate lead hazards. The buyer must acknowledge receipt of this pamphlet and information on lead-based paint hazards on the EPA disclosure form.” see more on Seller Responsibility to Disclose Lead-based Paint Hazards.

The seller can provide 10 days for the buyer to do a risk assessment or paint inspection for lead-based paint or lead-based paint hazards. Failure to comply with the federal disclosure could lead to litigation and suffer charges for the damages (usually could cost over $10,000). Check out this article about Lead Paint in Your Home for a detailed view on health hazards, from lead hazards to lawsuits it may concern.

For safety purposes, the homebuyers may look for a lead hazard inspection firm by following this link.

sellers disclosure

What you don’t necessarily need to disclose?

Some of the states have a “Caveat Emptor”, a neo-Latin phrase that also means “let the buyer beware”, or the “Buyer Beware Rule”. The rule states that it is the buyer’s responsibility to find out if there are major or minor defects with the property. It serves as a warning to the buyer. And if he/she does not perform the necessary due diligence to inspect, it’s entirely not the seller’s liability if the property does not meet the expectation.

However, there are certain topics and issues the owner is not obligated to disclose unless if the buyer doesn’t ask about it. Certain information such as homicide and suicide. Or about prior residents that were infected with HIV or other diseases that can be infectious. These are mostly issues that are not mentioned in the sellers disclosure form and can be regarded as non-relevant and could be left untold.

Here are seven important things you have to keep in mind when signing a sellers disclosure form.

  1. Leave nothing unanswered or blank behind in the form. Fill out the document completely. Because if you send an incomplete form, your agent will have to send it again. Review and read thoroughly.
  2. Prepare your ownership title documents and all the necessary closing costs forms. Make sure it’s verified and original.
  3. Only a single person can fill out the form. But you can ask for your agent or real estate attorney to review your answers in the form. Especially the checkboxes and the explanation section.
  4. Contact your agent if you have questions. Or you can ask for your real estate attorney’s legal advice regarding disclosure laws and requirements.
  5.  Your previous inspections can be used as a reference when you’re completing your Seller’s Disclosure Notice.
  6. Never skip the checkboxes. Once you’ve filled out the form, you have to recheck it carefully this time.
  7. If you’re having a second thoughts on what you should disclose, just include it for assurance. There’s no harm in disclosing what’s not asked.

The seller’s disclosure standard form is a legally binding agreement and must not be considered as a warranty. In this form, the seller should disclose a variety of facts about the property based on the seller’s actual knowledge and information—and to answer fairly.

sellers disclosure

What happens if a seller fails to disclose?

If the seller does not disclose property defects honestly—and did it intentionally—he/she could be liable for several damages and can be punishable by law. Idaho law, for instance, states that “no transfer, subject to this chapter, shall be invalidated solely because of the failure of any person to comply with any provision of this chapter. However, any person who willfully or negligently violates or fails to perform any duties prescribed by any provision of this chapter shall be liable in the amount of actual damages suffered by the transferee.” The seller could face litigation and pay damages, and as well as the fee for the buyer’s court and attorney. Litigation is a costly procedure and can lose you a lot of money.

Nothing good will come if you’re trying to trick the buyer for a larger profit. It can even cost you more and would smear your reputation bad. So, it’s better to notify the new homeowner with the information you are aware of.

However, there are defects the seller could be unaware of, too. That’s the more reason to get a professional home inspector to do a careful examination on the property—and as well as report on pest infestations and such.

Likewise, it’s wise to contact your real estate attorney in case you have doubts or inquiries regarding the forms. Hire an experienced real estate attorney on your local statutes that could manage and assist with your legal documents.

Pro-Tips in Home Sellers Disclosure Statement

  • 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 when in doubt. You’re going to regret it if you won’t.
  • Hire a professional inspector to gather backup information about the property’s condition—or you can conduct a pre-inspection before listing.
  • Even though it’s a minor issue, disclose, disclose, disclose.
  • The best way to avoid disclosure issues is to get an experienced real estate agent to manage and assist you in the process along the way.

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Did you know Houzeo’s Gold Plan provides relevant Federal and State Seller Disclosures?


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