Inside Real Estate – Ep 26 – What Should a Seller Disclose?

Tips & Advice

 
Our topic today is “What Should a Seller Disclose?” I get this question a lot. If any of you are old enough to remember Saturday Night Live, the short answer is what Roseanne Roseannadanna said, “Everything.” You disclose everything.
 
The question I get often is, “Well, Doug, if I disclose everything, the buyer’s not going to want to buy my house.” It’s actually the opposite. If I see disclosure statements filled out from sellers, sometimes it’s like they filled them out in crayon and there’s nothing in there. Buyers don’t believe it. Authenticity is the key. The more authentic you are, the more truthful you are, and the more diligent you are in your disclosure package, the higher the comfort level the buyer has.
 
These are not brand new houses. Things get broken, things change, things get updated, things get repaired. It’s okay. The more you demonstrate to a buyer that you’ve repaired and taken care of the house, the more comfortable they are.
 
Let’s take a look at some of the specifics, and these are things that sellers often have questions about. Here’s what you definitely should disclose, if you’re a seller: all repairs, replacements, upgrades, additions, and modifications. You should disclose. You should disclose all issues that have been resolved or will require regular maintenance. Any conditions that make the property less desirable to potential buyers: loud neighbors, easements, drug dealing on the block, etc.
 
Permits obtained for any work. You should disclose whether or not you got permits, if permits are required. You should disclose any pending legal actions or disputes with neighbors. You should disclose any pending HOA increases or assessments, of course. Any leased items, alarm systems, water softener, etc. You should disclose those.
 
Solar systems. Definitely should disclose whether they’re owned or leased. If they are leased, for sure you need to execute a transfer agreement, and you have to be approved as someone who’s assuming the lease on the solar. You need to get into the solar system and agreement, and make sure there’s a transfer that takes place, and make sure you disclose to the buyer what the monthly cost is. It’s even a good idea to inform the buyer of the true up costs. The annual costs, where you pay for the excess electricity you used or get a refund, hopefully.
 
Any unclear lot lines or encroachments. If you have a country property, and you’re not quite sure where the lot line is that needs to be disclosed to the buyer. Any standing water flooding after rains should definitely be disclosed. This is one of the biggest sources of non-disclosure lawsuits in real estate. Sprinkler systems that don’t reach all of the areas of your yard. If there’s any areas of your yard that you have to water by hand, you should disclose that to the buyer.
 
A death on the property within the last three years. State law says you must disclose to a buyer a death on the property within the last three years. If someone asks you if someone has died on the property, even if it’s beyond three years, you have to answer truthfully. You can’t lie about that.
 
You should disclose any rodent activity. It is very common in these more mature neighborhoods. Inoperative or broken window coverings. You should probably let the buyer know. You should let them know about any airplane noise, freeway noise, train noise, or any kind of traffic noise, or businesses that operate behind you that are noisy. You should let the buyer know.
 
Anything the neighbors will tell them. And that might be the most important of all. The buyer will find out. The neighbors will tell them. So please don’t think you can get away, as a seller, get away with not mentioning something because it’s not obvious, only for the neighbor to end up mentioning it to the buyer. That’s no good.
 
Best to be transparent. Again, buyers are more comfortable when there’s transparency, and when they feel you’ve accurately stated the condition of the property. A Detailed record of property repairs and services reassures the buyer that you’ve maintained the property in good condition.

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