Home Sellers: Don’t Make These 6 Common Disclosure Mistakes
As part of the home-selling process, sellers have a legal obligation to disclose past and present defects to potential buyers. Despite this being one of the most important steps in the sales process, it’s one that is often filled with mistakes — and these can be costly. Failure to properly disclose defects can not only cause the sale of your home to fall apart, but they can also lead to lawsuits.
Here are just a few of the most common disclosure mistakes sellers make:
#1. Not disclosing home improvements made without permits
The disclosure process requires that sellers are honest with their remarks — including if any DIY improvements to their home were made without proper permitting. Most disclosure paperwork asks about any room additions, structural changes or other improvements made to the property.
Whether you did or did not know that permitting was required for the type of improvements you made to the house, all of these improvements should be disclosed.
#2. Withholding previous inspection reports
Disclosure laws vary from state to state; however, some states require that you provide any previous home inspection reports that you’ve received for the home. This could include the home inspection you did when you purchased the property (depending on how long ago that was), as well as any pre-inspection report that you conducted prior to listing your home.
Sellers often want to leave these inspections out (or just don’t know they need to include them), but many states do require them to be provided to the buyer.
#3. Failure to report previous defects that may have been corrected
It’s not uncommon for sellers to leave previous defects off the report if they’ve been fixed and are now in working order. However, most disclosure paperwork requires sellers to list any “past or present” defects, which means disclosing items that you’re aware were past issues — even if they were before you owned the house and even if they’ve been fixed.
#4. Not updating the disclosure before the sale finalizes
Sellers often fill out their disclosure forms when they first list their home for sale. However, a lot can happen between the time you list your home and when it sells. If anything new comes to light during that time — if you remember a previous repair or the roof starts leaking — it’s imperative to update the disclosure form to keep all parties abreast of new information.
If you’re in doubt about whether you should disclose something or not — it’s always best to disclose. And, if you don’t understand what a question means, you should always ask your real estate agent. The seller’s disclosure paperwork is a legally binding document. Guessing or making a mistake out of ignorance or misunderstanding does not mitigate your liability.
#6. Having incomplete disclosures
Another big mistake that can open you up to liability is when the disclosure paperwork is not completed — or is completed incorrectly. Whether you don’t understand a question or may not feel you know the “right” answer, don’t skip the question. Another thing to keep in mind is that for every question you answer “yes” to, you must provide an explanation, preferably detailed.
Knowing what every question means is a tall order; there are several resources that can assist. Glide’s contextual help includes explanations and images for commonly confused questions. You can also consult with your real estate attorney or agent.
Is Your Seller’s Disclosure Accurate?
Don’t wait for a lawsuit to realize the importance of your disclosure paperwork! Ask your real estate agent if they’re using Glide — the best way to stop lawsuits, save time, and protect real estate sellers.