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When selling your property it is most important to disclose, disclose and disclose!
Sellers must disclose certain characteristics of the property to potential buyers. An agent who is a REALTOR® can help you understand why and what you need to disclose, but here are the basics:
What are seller disclosures?
Seller disclosures are certain material defects—elements of a home that may negatively impact its value—that sellers must disclose to buyers in a legal document. While specific disclosures are dependent on state and local law, sellers are typically required to list any completed repairs, information about natural hazards, property defects, missing essentials, land-use limitations, HOA guidance, deaths on the property, and any other conditions that might negatively impact the property’s value.
Why are seller disclosures important?
Seller disclosures are important because they help protect both the buyer and the seller. The disclosures allow buyers to choose whether they want to make an offer on the house based on what the seller is disclosing about the property, or can influence the offer amount. For sellers, the disclosure can help protect them from legal liability, meaning they will not be responsible for any issue that arises on the property after the sale as long as it was previously disclosed.
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Legal Requirement:Texas law requires sellers of single-unit residential real property to provide a written notice to purchasers, outlining their knowledge of the property’s condition.
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Purpose:This notice, also known as a Seller’s Disclosure Notice, aims to inform potential buyers about any known issues or defects that could affect the property’s value or desirability.
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Not a Warranty:The disclosure statement is not a warranty, and it doesn’t substitute for inspections or other due diligence the buyer may wish to conduct.
What if there are no defects that need to be disclosed?
A seller can state that there are no material defects on a property on the disclosure form. However, even if you are unsure as to whether a potential defect needs to be disclosed, it is best practice to disclose it to avoid potential legal liabilities in the future.
What to Disclose?
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Material Facts:Disclose any material facts that could affect the property’s value or desirability, including:
- Structural issues (foundation, roof, etc.)
- Water damage, flooding, or drainage problems
- Pest infestations (especially termites)
- Age and condition of major systems (HVAC, electrical, plumbing)
- Environmental hazards (mold, radon, asbestos, etc.)
- Natural hazards (floods, earthquakes, etc.)
- Zoning issues (school districts, transportation projects, etc.)
- Repairs made and repairs needed
- Structural issues (foundation, roof, etc.)
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Special Circumstances:Disclose any special circumstances, such as:
- Location in a flood zone
- Fire damage
- Ongoing disputes with neighbors
What happens if a material defect about a property is not disclosed?
If a seller knowingly withholds information regarding a required seller disclosure, there may be legal consequences. A buyer could cancel the sale, or the seller could be legally liable. Sellers should be honest with any and all details they are required to disclose about the home.
- Location in a flood zone
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When in Doubt, Disclose:If you’re unsure whether something needs to be disclosed, err on the side of caution and disclose it.
