What Homeowners Need To Know About Property Disclosures When Selling A House?
Are you considering selling your house but are unaware of what you need to disclose within a property disclosure statement?
Typically, when homeowner's go to sell their house, you may see them put a fresh coat of paint on the walls or fix a leaky pipe.
90% of the time, this is to get the property looking it's best for the sale.
However, the seller may be making these minor adjustments to cover up a larger issue.
When a homeowner goes to sell their property they are required to disclose any material facts they may be aware of in regards to the properties condition.
This information will tell the buyer, if there is any serious issues with the house that may need to be addressed.
You may be thinking, isn't that what an inspection is for. The short answer is yes, but not all times will the inspector find all the issues within the house. The homeowner who has been living in the property for an extended period of time and dealing with these issues, may have better insight.
It is not required by law in all states to complete a disclosure, but if you live in the Syracuse, NY area, it is against the law to fail to disclose certain property conditions.
In the state of New York, you may be found liable if you fail to disclose these conditions or you will be required to pay a $500 credit to the buyer at closing.
This disclosure will be created to hand out to any potential buyers of the property. If you have hired a real estate agent, they should assist you with this process. However, if you have decided to sell your property for sale by owner, you will be required to handle this process on your own.
We have attached a blank copy of a New York State property disclosure below for you, if you need it.
What Do Sellers Disclose To Potential Buyers
When it comes to disclosing the material facts about the property. The homeowner is required to disclose any physical flaws of the property, improvements, renovations or upgrades. Here are some examples of material facts that you will be required to disclose:
The roof leaks
The basement has flooding
The foundation of the property has cracks
The furnace is not working properly due to failed heating exchange
The neighbors garage driveway is partially in your lot
The home does not legally conform to the lot
High radon levels
Mold in the home in excess levels
Typically, within a standard property disclosure, the homeowner will be asked to answer a bunch of yes/no type questions in order to disclose as much information as possible to the new homeowner.
If you are purchasing this property for your primary residence, you should check the seller's disclosure with city building and zoning permits. Work completed without a permit, or approval by the municipality, may not have been performed to code. This could result in your property only have 1 bathroom, rather than 2 or even worse fire and health hazards.
What Is A Sellers Property Disclosure Statement?
When it comes time to sell your home, you will be required to disclose everything you know about the home. Typically, the seller is required to fill out this form without the help of their real estate agent. As stated, filling out a property disclosure is not required in all states, but is recommended in most. In the State of New York, all home sellers are required to fill out and complete a property disclosure or they will be required to pay a $500 credit at closing.
This property disclosure will be the buyers opportunity (aside from an inspection) to learn as much about the property as possible before purchasing. Not only will this disclosure inform the potential buyer, but it will cover the seller's from any potential liability down the road. This is the sellers chance to reveal anything that will or can negatively effect the value or usefulness of the home.
Make sure if you are the seller of the property, that you take the time to fill out this property disclosure. If you are unaware of or can not answer some questions, you are able to mark "I don't know" but make sure that you are really unaware of the current status of that line item.
What Happens If The Seller Fails To Disclose Material Facts
The tough part with disclosing material facts is that homeowner's may not know exactly what material facts are. You would have to have reasonable doubt that the seller failed to disclose a material fact on purpose. It is reasonable to assume that if a home seller knows about issues that would affect a buyer from purchasing the home, they should disclose this information.
Each state has their own requirements, so be sure to take a look at your specific state requirements and follow correctly. In the State of New York, if you fail to disclose information that is wrong with the house, the buyer does have the right to sue you for the damages.
Remember, when you are selling the house. The buyers, will get an inspection done on the property and anything that you failed to disclose will be required to disclose for future buyers.
So, just to be safe. Be as upfront and honest throughout this process and if you have serious issues with the house, consider making these repairs or selling the home as is.
Wrapping it Up
When it comes to the property disclosure of the property that you are selling, we recommend that you over disclose the information on your house. This will prevent any chance of you being sued down the road and being held liable for your actions. No one wants to go to court, and this will cost you much more money down the road compared to if you disclosed up front. Before you decide to sell, make sure you consult with your local real estate experts to better understand all of the laws in place for your state.
HS Property Funds
Funds to Help, Problems to Solve