Selling a Home? Consider Erring on the Side of Caution With Disclosures

When it comes to selling a home, it’s human nature to want to gloss over some of its less compelling selling points. The idea is that the buyer will likely discover the truth during the inspection, so the seller can fudge the truth a tad. But there’s a danger to doing this, both from a practical standpoint and a legal one. To make it easier for everyone, it’s usually best to tell the whole truth if a seller is asking themselves just how much to reveal about the state of the home.

Worried about what you should disclose during your sale? Consider consulting with a legal professional to make sure. A general rule of thumb is to disclose everything the seller has knowledge of, but specific rules and requirements can vary from state to state.

The Seller Experience

Sellers generally know the house as well as anyone can, which makes them the go-to source for information. They may not have torn down the walls to discover the treasures inside, but they know both the good and the bad of how the home works. Home inspections may be a common tool for buyers to find any flaws that the seller may not have known, but sellers are still required to disclose known problems to the buyer. While the details may be different depending on the state the seller lives in, the general rule is to disclose as much information as possible so the buyer can make an informed decision.

Ending Up in Hot Water

If a seller is aware that their electrical wiring is not up to code and a home inspector ends up including this fact in the report, then the buyer may want to drop the sale entirely rather than negotiate to have the wiring fixed. Sellers need to be aware of how they’re coming across to potential buyers during the selling process. If what they say doesn’t match up to what the truth is, then the buyer may have every reason to back away. This is not only a waste of everyone’s time but could also discourage future buyers from making an offer. If the wiring was found to be outdated after the sale already goes through, the buyer may be allowed to sue the seller if they can provide proof the seller already knew about the issue.

Knowing the Rules

When it comes to official rules among the various required disclosures sellers must offer, some are more important than others. Lead paint, termite damage, major repairs, mold, and hazardous conditions all may need to be disclosed prior to the official sale. So sellers must tell buyers if the home is in an area that’s frequently hit by earthquakes or if the basement has water damage. They also typically need to disclose if the property was a crime scene prior to the sale. Sellers can certainly check their state rules to learn more, but it’s usually better to disclose this major information whether it’s officially required or not.

Selling a Home As-Is

Some sellers attempt to skirt around these rules by selling a home as-is. While this label may not attract the most conventional buyers, it does allow a seller to get out from under the home without having to make promises that they may not be able to keep. But selling a home as-is doesn’t mean a seller can just lie to the buyer about its flaws, it only means that they’re not required to make any repairs or concessions to the buyer in order to sell the home. If the seller knows about major structural problems that could pose a threat to the buyer’s safety, they’re still required to give the buyer that information. (In some states, this information will need to be put in writing to satisfy requirements.)

A Better Way

A seller who claims a home has no problems whatsoever will quickly tip a buyer off that something may be lurking beneath. Buyers want to see that a seller has kept up with their home, and full disclosure can make it easier to prove that it was well-cared for throughout the years. Even if there are still problems with it, sellers who can show they’ve made repairs and practiced regular maintenance stand a better chance at gaining a buyer’s trust. Real estate agents will always err on the side of caution because it’s far easier to work out negotiations before the paperwork is drawn up rather than after.

Selling a home will undoubtedly be one of the more confusing things a person can do in their life simply due to the magnitude of potential mistakes. Leave out a single detail by accident and the buyer may end up serving the seller a massive lawsuit (even if it wasn’t the seller’s fault!) The best way to mitigate the chances of a nasty dispute occurring after the sale of the home takes place is by being as upfront with the buyer as possible about the realities of the house.