Most states have laws that require home sellers to disclose what they know about the operating and environmental
condition of their homes as well as any situation or encumbrance that may affect the home’s value.
If a shower pan leaked on the floors, and was repaired, that must be disclosed to the buyer, even if there are no outward
signs that there was ever a problem. A disclosure form is called a Real Estate Disclosure Statement, Property Condition
Disclosure, or Condition Report. They are required by the federal government to disclose the presence of lead paint, and
many states require seller disclosures with regard to radon, gas believed to cause cancer.
Some states allow sellers to disclaim disclosures to make an “as is” sale, which means the seller has no intention of
guaranteeing the property, but they must do so in writing. Even then they must disclose any material defects they know of.
Such forms say something to the effect of “the owner of the real property makes no representations or warranties as to
the condition of the property and the purchaser will be receiving the property as is with all defects which may exist”. Even
then, the seller must fill out a federal and/or state-mandated disclosure form.
While the forms may ask sellers to disclose whether or not they know there is lead paint or radon present, sellers aren’t
usually required to do tests to determine the presence of toxic chemicals. But if the seller notes the existence of a
problem, he or she may need to provide proof of tests and/or remediation for any problem that has been disclosed,
including fire and water damage.
If you are a seller, your real estate professional will provide you with the disclosure documents you’ll need to sell your
home. It’s important to answer every question as truthfully as you can. Your real estate professional can not fill out the
disclosure for you. If you’re in doubt about what to disclose, such as a repair, it’s best to err on the side of too much
information than not enough. You don’t want to give the buyer any room for complaint after the closing. Sellers aren’t
expected to know everything about their homes. Disclosure forms allow you to check the “I don’t know” box, but you
should only do so if you truly don’t know the condition of a certain appliance or system. When you disclose a problem to
the buyer that has been fixed, be sure to provide a copy of receipts and invoices. The repairs should correspond with the
problem. Many agents provide a copy of the disclosure to interested buyers, so they can get an idea of the home’s
condition before making an offer or having an inspection.
If you are a buyer, read the seller’s disclosure carefully and use common sense when you see that something has been
flagged. Leaks often produce mold, so ask the seller if the area with the leak has been tested for mold. If a seller disclosed problem hasn’t been fixed, you can either ask the seller to fix it, or offer a little less for the home. Keep in mind that sellers aren’t expected to disclose what should be obvious or discernible to you as the buyer. Use the disclosure as a
guide for what to look at throughout the home. If one shower pan has been replaced, chances are the shower pan in the
second bath will need to be replaced soon.
The best way to feel confident about the condition of your home is not to rely on the seller’s disclosure. Have the home
inspected by a licensed professional home inspector. For a few hundred dollars and a few hours of your time, you can
follow along and learn as much as possible about the condition of your purchase.