Last Updated on January, 2025
When selling a property, common real estate disclosures you must know are not just recommended—they are required. Skipping over these can lead to legal headaches and even lawsuits.
Quick Summary
- Disclosures are legally required details about the property’s condition that sellers must provide to buyers. These help buyers make informed decisions and protect sellers from legal issues. Failure to disclose can lead to lawsuits, reversed sales, or financial liabilities.
- Key disclosures include lead-based paint (for homes built before 1978), water damage or mold, structural problems, neighborhood nuisances, and legal disputes like property liens or boundary issues. State laws vary, but transparency is crucial.
- Sellers typically fill out a disclosure form covering property details like roof leaks, plumbing issues, or pest problems. Honest disclosures prevent buyer disputes, protect the seller from legal troubles, and foster trust, making the sales process smoother and more reliable.
What are Real Estate Disclosures?
A Disclosure is a details about your property that you are legally required to provide to potential buyers. Think of them as critical background information that buyers need to make informed decisions.
Whether it’s cracked foundation or a mold problem in the basement, withholding these details could get you into legal hot water. Disclosure laws vary by states, so it’s important to
know your local requirements.
Common Disclosures You Must Know
Every state has its own list of required seller disclosures, but here are some that commonly appear:
- Lead Based Paint: Federal laws mandates that sellers disclose the presence of lead-based paints for homes built before 1978. It’s not just a requirement—it’s a health issue.
- Water Damage or Mold: Even if you’ve fixed a leaky pipe, you need to disclose any past water damage. Mold, which often results from such damage, is another property disclosure must, as it can negatively affect both property value and health.
- Structural Problems: Does your house have foundation issues? Any cracks or major repairs you’ve had done on walls, plumbing, or electrical systems should be disclosed.
- Neighborhood Nuisances: Got noisy neighbors? Or your property is near a busy street or train track? A buyer needs to know about anything that might affect their living experience, even if it’s out of your control.
- Legal Problems or Boundary Disputes: If there’s lien on your property or property line disputes with neighbors, full transparency is required. These types of legal troubles can derail a sale if discovered too late.
Additional Disclosures to Keep in Mind
Depending on your state’s laws, here are few other typical disclosures you might need to make:
- Natural Hazards Disclosure: Is your property in a flood zone or prone to earthquakes? Some states require you to disclose this information.
- Homeowners Associations (HOAs): If your property is a part of a HOA, you’ll need to let the prospective buyer know what that entails, such as fees, rules, and restrictions.
- Death on the Property: In some states, you are legally obligated to tell prospective buyers if someone has died in the home, particularly if it was a violent death.
- Registered Sex Offenders: Some states require that you inform buyers if a registered sex offender lives nearby.
Key Disclosure Laws
State laws differ, but most require sellers to disclose known issues. For example, federal law mandates that homes built before 1978 disclose any presence of lead-based paint.
You’re also on the hook for anything that could affect the home’s safety or resale value, such as water damage, foundation cracks, material defects, or even neighborhood nuisance like airport noise.
Failure to disclose this information could cost you. Buyers who discover issues after closing can sue, and legal battles are costly. The good news? Being transparent with buyers is often appreciated and can smooth out the negotiation process.
Why You Must Disclose?
Disclosing issues is a win-win. For buyers, it’s about knowing what they’re getting into. For sellers, it’s about covering yourself from future lawsuits.
If buyers learn after the fact that you kept something from them—like a termite problem, you might end up in court.
On top of that, honest disclosures tend to prevent buyers from backing out at the last second, keeping the home sales on track.
Think of it this way: a buyer who knows about a small leak in the roof before the sale might still proceed, either asking for a price adjustment or planning to fix it themselves.
But if that same leak is discovered later, the buyer may demand major concessions—or worse, legal action.
What Happens if You Don’t Disclose?
Failure to disclose can have serious consequences. Once a buyer finds out that you didn’t tell them about something major like the fact that your roof leaks, they could take you to court.
In the worst-case scenario, the sale could even be reversed, and you’d be on the hook for the buyer’s legal fees and repair costs.
How to Handle Disclosures?
The process of disclosing property details isn’t just about honesty—it’s about using the right and legal document. In most states, sellers fill out a disclosure form that includes questions about the property’s condition.
From roofing to plumbing, this seller’s disclosure statement covers various aspects of the property.
Even if your state doesn’t have a required form, it’s a good idea to provide one. It helps formalize the process and protects you if issues arise later.
If you’re unsure about what your state law requires, consult with a real estate attorney. They can help you navigate local disclosure laws and ensure that you’re protected. Plus, using a real estate agent will give you peace of mind.
Real estate agents are experienced with these forms and can guide you through the process.
The Seller’s Disclosure Form
The seller’s disclosure document is essentially a checklist of everything the buyer needs to know before purchasing the property. It includes details about:
- Roof leaks or damage
- Plumbing issues
- Electrical systems
- Pest problems
- History of flooding
Some states may also ask about previous renovations or even if anyone has died on the property. It sounds intense, but it’s better to be upfront. Buyers appreciate honesty, and it minimizes the chance of future disputes.
Environmental and Health Hazard
It’s not just about the house’s structure, sellers also need to disclose environmental hazards. For example, radon and asbestos are two common health hazards that require disclosure. These substances can significantly impact a buyer’s decision and are subject to strict laws.
Federal guidelines, like those from the Environmental Protection Agency (EPA), can help clarify what needs to be disclosed in these situations.
Relevant guides:
Conclusion
Selling a home is already complicated enough without legal trouble. Disclosing everything you know about your property, whether it’s a leaky roof or a neighbor’s dog that barks all night, is the best way to protect yourself.
It may seem daunting, but buyers appreciate sellers who are upfront and transparent.
After all, buying a home is a big decision, and home buyers deserve to know what they’re getting into.
Being honest about the condition of the property not only keeps you out of legal troubles but also helps build trust with potential buyers. And when it comes to a real estate transaction, trust is everything.
