What Should Sellers Disclose on the Sellers Property Disclosure?

What Should Sellers Disclose on the Sellers Property Disclosure?


Are you about to put your house on the
market and you’re trying really hard to make that place as perfect as possible?
Of course you are! But, just because you are working hard to put your house’s best
foot forward does not mean that you should get a massive case of “disclosaphobia” when it comes time to fill out your sellers property disclosure. Hey there, Emily Farber at Lepic-Kroeger,
Realtors® in Iowa City, Iowa. I’m a Realtor® serving the greater Iowa City area. The
topic of today’s video is: What should sellers disclose on their sellers
property disclosure to buyers? A sellers property disclosure is a required
document in most residential real estate sales. The purpose of the sellers
property disclosure is that you, the seller, are informing the buyer of all
potential issues that you have had, or may currently have with your house. Now, I
know when you’re selling your house you want it to seem as sparkly and perfect
as possible, and you feel like you’re protecting yourself and promoting your
interests in wanting to present your house that way. But it’s important to
understand that the most dangerous information is information that is
unknown. So, even though you don’t want to talk about that leak you had in your
roof, it is better for you to be honest about it,
disclose it up front and what you did to fix it, and then move forward. After all,
the unknown that pops up later is always a bigger problem than a known issue that
was disclosed up front. The purpose of the sellers property disclosure is to
bring to light any latent defects that may be a part of your house. A latent
what? A latent defect. A latent defect is an issue with the house that may not be
readily apparent to the eye. So, if I’m walking through your front door and I
see a big hole in the drywall next to your kitchen that’s not a latent defect.
It’s obvious to the beholder. A latent defect is something that is hidden, that
there is not a reasonable expectation that the buyer, the buyer’s agent, or the
buyer’s inspector might find it. Hidden things like past water damage,
foundational issues, electrical problems, a
a house flood that happened and then was cleaned up, or a house fire that happened
a few years ago and has since been repaired. Those are examples of latent
defects and those are things that you need to be very upfront with on your
sellers property disclosure. More information is always better than less
information, missing information, or inaccurate… lies. Don’t do it! There’s been
cases where I have toured property and the sellers property disclosure is
obviously inaccurate. For instance, I’ve been in houses where they say, “Oh no,
we’ve neeeever had any problems with water in the basement.” Yet while I’m there I
can see water actively trickling in! That does not make me feel confident about
the overall condition of the house and it doesn’t make me feel confident about
the seller. When you hide things or lie about things you are only raising more
red flags and more problems for yourself, as a seller.
Don’t do it. Be honest, be open, and disclose. When in doubt disclose, disclose,
disclose some more! It’s always better to over disclose, and you may think, “Oh my
gosh! Nobody’s ever gonna want to buy my house if they find out about all this
random little nitty-gritty stuff about it!” That is not true. It is always better
for the buyer to walk in eyes wide open and be fully aware of what they are
writing an offer on rather than have a whole bunch of issues show up post
inspection or post closing. That is where you run into a lot of trouble.
The sellers property disclosure really protects not only the buyer, in giving
them a fuller understanding of the property that they are writing an offer
on, it also protects you as the seller. And how is that, you think? I know it
seems a little bit backwards but it’s true! Once an offer is written, and the
buyer initials and signs off on that sellers property disclosure, that means
that they acknowledge that they are aware of all of those issues and they
are not going to come back and hold you responsible for them later. Just because
you put something on the sellers property disclosure does not necessarily
mean that you have to fix it. Sellers property disclosures vary from
state to state, county to county, and they even vary from city to city. Here in the
greater Iowa City area we have a sellers property disclosure that is
pretty sparse. Our disclosure is only two pages long.
It covers major components of the house. However just 30 minutes to the north, in
Cedar Rapids, Iowa, their sellers disclosure is six pages long! This thing
seems so crazy long to me. It’s not the one that I use most of the time, but it
is much more detailed than the Iowa City area sellers property disclosure.
Now, each MLS has their own theories on why they use what they use, and why they
think their version is better, but just be aware that a sellers property
disclosure that you may have been familiar with in another area is not
necessarily going to be the same sellers property disclosure that you’re
working with when you go to a new area. There’s one disclosure that is
universally required across the board no matter where you are. And that is the
lead based paint disclosure. It is a national requirement. If your
house was built prior to January 1st 1978 you must include a lead-based paint disclosure with your property. In the Iowa City area,
the sellers property disclosure asks you questions about: basement and foundation,
roof, well and pumps, septic tanks or drain fields, the sewer system, the
heating system, the central cooling system, the plumbing system, the
electrical system, any pest infestations, asbestos, radon, lead-based paint, flood
plain, zoning, covenants, shared or co-owned features of the property,
physical problems of the property, or structural damage. Hey, I hope this video
about sellers property disclosures has been helpful.
Remember, the sellers property disclosure doesn’t only protect the buyer, it really
protects you as the seller. So, when in doubt, always disclose. Hey, as always,
thanks for watching. Don’t forget to subscribe, and if you hit that bell icon
down below (this is my pro tip of the day) you’ll be notified every time I put out
a new video, which is every Friday. I hope you have a great day, and I’ll catch you
next time!

Comments

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    Wise Move AZ

    Well said, Emily! No such thing as 'over-sharing' when it comes to disclosures. Our disclosure form is developed by the state association here in AZ 😊

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    the babbinos

    Our sellers disclosure form is provided by the state and is not required to be completed but sellers and their Realtors are required to disclose any significant property defects that may not be easily visible to the buyer.

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    Amy Hayslett Realtor

    We have a major i buyer/seller that has an addendum stating no SPDS (seller property disclosure) provided. While the AZ state form is not required, AZ law still requires disclosure. I say no SPDS no offer. Huge 🚩 red flag.

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    Georgia Coast Homes by Karin Carr

    Our policy is if you have to ask whether you should disclose it, disclose it. Better safe than sorry.

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    Theresa Wellman - Realtor Homeowner Experience

    Great information and I really appreciate the information that sellers actually make things easier for themselves if they just disclose upfront

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    Susan Hicks Thetford

    Well thought out Emily… "The unknown that pops up later is always a bigger problem…" Great point

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