Home Purchase ProcessBecause Sellers Should Tell Buyers Certain Things

Sellers have a growing list of disclosures they are required to make to buyers before selling their properties now. However, caveat emptor is still the word of the day when it comes to real estate. Sellers may attempt to cover up defects in a property or misdirect buyers with attention-grabbing furnishings.

Over time, states have created regulations to force sellers to confess a variety of sins, because of the efforts of victims, activists and well-connected buyers who become righteously annoyed. State governments, counties, and cities write the regulations and prescribe the forms of disclosure to prevent acts of deception. Where states force sellers to document defects buyers can be more confident of not having ugly surprises at some later date.

Paperwork By Order Of Your State

Disclosure statements refer to physical property defects or dangers. Alternatively, they can be notifications of some issue within the community or natural hazards. Disclosures can cover anything from criminal activity to radon gas or pollution. Each state has a list of disclosure requirements that accumulated over decades.

Your real estate professional will have all of the information you need as to what applies in your region. State, county and city rules and regulations prescribe the content of disclosures, but agents have boilerplate forms, which come from legal stationers. Like many legal and real estate forms, the structure has to be precise and complete. The National Association of Realtors provides many of the standard documents for the industry, including for disclosures.

Standardized forms reduce the cost and ensure that the parties can comply with the rules correctly. These forms have the relevant standard statements and tick boxes where the seller makes the appropriate indication. Sellers also have requirements to disclose where neighbors, agents and prior owners have informed them about defects that may be present.

Disclosures Differ From Independent Inspections

Third party inspections are not the same as disclosures. As a buyer, you are responsible to get all of the necessary inspections done on your own initiative. If you apply for a mortgage from a bank or other lender, the institution will make it a requirement to show that you have had the inspections by a suitable professional.

Depending on where you are shopping for a home, the seller will present the disclosures, up front or when they have received an offer. It helps the seller to get disclosures done as soon as possible. If buyers are likely to back out, as they have the right to do, it is best to get it over with before the seller has invested too much time and effort.

Extra Effort That Protects Everyone

Disclosure requirements do modify the free market dynamics to some degree. Failure to disclose defects or issues of some king might easily result in litigation or, in extreme cases, prosecution. So sellers rely on their agents for advice and take an abundance of caution to avoid penalties.

Documenting all disclosures on the appropriate forms also protects the seller, they may have to demonstrate their compliance after the fact for any reason. Buyers have to sign off on disclosures too as part of the paperwork that goes with the purchase. So, disclosure statements show for the record that the seller gave proper notification and that protects everyone. Sometimes a bit of additional work during the process makes the outcome better for all involved.