When you want to sell your home, revealing information about defects and damages seems completely contradictory. Why would you tell someone that you’ve spotted a crack in the foundation when you know they won’t offer anything close to your asking price once they have that information?
No matter how detrimental you may think a disclosure will be, it’s a requirement that ensures you operate on the right side of the law. If you leave something out, the sale price of your home could be the least of your worries.
What MUST You Disclose?
The information you must disclose varies from state to state. The disclosures made in Tennessee are not the same in California. Disclosure documents are legally binding and, as such, the information you release must be at least the minimum that the state requires. You can always offer more information if you feel it is relevant to the sale of your home.
Although laws differ, there are a few things you must disclose, as well as items you should never bother sharing.
- Repairs and Damage – If you’ve owned your home for any length of time, you’ve experienced some level of damage and some type of repair work. And, it’s exactly what buyers need to know before making a decision. Report any repairs that required a permit and anything that affect the electrical, plumbing, HVAC, or structural parts of the home. But, you shouldn’t worry too much about leaky faucets – unless you think there is something more happening.
- Natural Hazards and Neighborhood Nuisances – These laws vary by state, but if you know the house has asbestos insulation, sits atop an old mine, or that lead-based paint is present, you need to let the buyers know. The same goes for disclosure about untenable neighbors, especially if there have been disputes about trees or fences.
- Death on the Property – If someone passed away from natural causes that were completely unrelated to being on the property, you don’t have to mention it. That said, unnatural or suicide deaths usually do require disclosure, as will violent crimes, the presence of ghosts (yes, that’s true), or a stigma attached to the property. In some states, disclosing that the death was due to AIDS is prohibited.
- HOA and Historic District Information – As lovely as your home may be the buyer may want to make adjustments to it. If additional approvals are required, you’ll need to provide full details upfront. Whatever you do, don’t neglect to hand over any HOA documents, even old minutes.
If you’re unsure about what you must disclose, or you can’t decide whether something is important or not, add it to the document. Often, buyers would rather see that you’ve spent time and money maintaining the property than a shorter list.
Also, remember that the disclosure document can be issued at almost any point in the negations – whether it’s done up front or further along in the process. Either way, a lot of the information will come out during your home’s inspection. If not then, you can bet it will come out at some point; and this usually leads to lawsuits and hefty payments to the new owners. That’s why full disclosure is always the best route.