What Does An Owner Have To Disclose When Selling?
No matter the home, they all have certain characteristics that you have come to love over time. If you are considering selling, these characteristics have probably popped back into your mind again. Many home sellers are nervous about disclosing any defects or problems in the home that could make it difficult to sell and turn a buyer off. That brings up the question, what exactly does a seller have to disclose when selling a home? Keep reading to learn what to share to a potential buyer.
Federally Required Disclosures
Only one disclosure is required federally for all 50 states. It is called the Residential Lead-Based Paint Hazard Reduction Act of 1992 or Title X. In real estate terms, it refers to any home that was built prior to 1978. If you own a home that was built before that date, then you must disclose if you are aware of any lead-based paint used. You will have an extra document to sign and provide to the buyers stating that they have agreed to the completed disclosure, as well as offered them the opportunity to test the home for lead.
State Required Disclosures
The majority of disclosures come to play at the state level. Sellers must disclose any known problems with the property – from pests to leaks and more. Each state has their own requirements on what should be included, but your REALTOR® should be on top of it providing you the proper document to fill out.
For Arizona, agents provide the seller with the Seller's Property Disclosure Statement (SPDS) to fill out for the buyer within five days of contract acceptance. The document poses a variety of questions for the seller to answer about the property. The Arizona Department of Real Estate advises: "Read the seller's property disclosure report, and check every item on it."
Most Commonly Required Disclosures
After the SPDS, there are just a few more common disclosures that are required.
Water Damage/Mold – A seller has to be upfront about these “known deficits” and if they have done anything to repair the issue. Even if it was just a minor leak or problem.
Pests – If you have ever had an infestation, you need to be open about it to a potential buyer. In Arizona, termites and scorpions are common pests to see disclosed on the SPDS. If you have done treatment for them, you will have to add that on there as well.
Insurance Claims – Sellers are required to provide a CLUE Report to the buyer within five days of contract acceptance. The CLUE Report lists homeowners insurance losses reported by any insurance companies that have insured the address within the last five years, or since the seller has owned the property, whichever period of time is shorter. It should help you assess whether the property is insurable, but know that it is ultimately your responsibility to determine whether you can obtain homeowners insurance on this home during the 10-day Inspection Period.
Unsure? Always Disclose
While you may feel apprehensive about disclosing some of the issues in your home, it is always important to be as honest as possible. Many of the problems can be easily discovered in a home inspection, so it is better to let them know ahead of time.
Not disclosing issues can lead to problems in the future, like a lawsuit or paying some major fees. If you are completely unsure about a particular problem, just ask your REALTOR®. But, as one last reminder, it is always better to disclose of everything you are aware of!
Have more questions? We have answers. Reach out to us by email at Info@MyriadAZ.com.
Source: Forbes.com
