So, you’re selling a house and you’re asking yourself: What do I need to disclose? Or possibly: What is disclosure? This can be especially important when you are selling your home without using a realtor (such as in a for-sale-by-owner transaction; aka FSBO, or in an off market transaction when you are selling directly to a buyer). Before we jump into the nitty-gritty of disclosures, however, it’s important to note that Door&Key buys houses in multiple different ways that just might fit your needs, all without the hassle of a traditional listing. So be sure to give us a call or send us an email for more information.
Selling a house can involve jumping through a ton of hoops. It’s paramount that proper precautions and steps be carried out in order to avoid a lot of headaches, road-blocks, or legal fees down the road. Disclosures are written information that pertain to issues or relevant problems with the property when selling to a potential buyer. Providing accurate disclosure statements essentially protects prospective homebuyers from unfair sales or even dangerous property situations (such as lead based paint, asbestos, foundation problems, or mold issues). Keep in mind that disclosure laws and requirements differ from state to state. We suggest consulting with a real estate attorney to make sure the right things are in place when selling your property. With that said, here is a list of major issues that need to be disclosed during a typical real estate sale.
You Have To Disclose Known Toxins
Depending on the era they were built, there are quite a few structures that are at high risk for known toxins. This is especially the case for older homes where building codes and standards were not what they are today, and where information about certain toxins was not as widespread. So, what toxins do you have to disclose?
Asbestos is one of those era-common toxins. It is a natural mineral derived product that is heat and corrosion resistant. It’s typically found in building materials from the 1940s to the 1970s and looks white and fibrous. It was mostly used in insulation and cement products. Asbestos can cause cancers and lung scarring in humans (sometimes called Asbestosis).
Lead Paint existence is also a higher risk factor if your house was built before 1978. It can cause lead poisoning which can lead to many serious health issues in both adults and children. Be sure to get your paint checked out if you have an older house.
Black Mold, however, can be found in nearly any structure, especially ones with previous or ongoing water damage issues. The mold can find its way into air conditioning ducts and therefore into the lungs. Side effects can include major respiratory issues (especially in children) and, in extreme cases, black mold poisoning.
Also called “hidden defects”, latent defects are problems with the house that can’t be seen at first glance or during a reasonably thorough inspection. In summation, these are dangerous or expensive problems that an inspector may not catch. This could mean past or present water leaks, electrical issues, HVAC heating and cooling problems, termites, or even the aforementioned mold issue.
The term latent defect may sound somewhat arbitrary, but that’s what makes it such an important disclosure. A homebuyer could argue that a plethora of issues (found on the property after sale) are latent defects and therefore tie you up in a hefty lawsuit. Therefore, a good rule of thumb is to disclose as many things as possible that are known issues on the property.
Paranormal Activity, Murders, And Suicides
Paranormal activity may sound a bit out there depending on your beliefs, but in some states, it’s actually illegal not to report any paranormal activity you may have experienced in your home. Many states have created laws that require sellers to disclose any important fact about a property that might negatively affect its value (including facts that might affect a potential buyer’s psychological status or stigma). However, not all states have this requirement. The states that require this disclosure include New York, New Jersey, Massachusetts, and Minnesota. So if you have a potentially spooky guest but you don’t reside in those states, you may be free and clear from this particular disclosure.
However, laws about disclosing deaths by murder, suicide, or natural causes on the subject property are more common. These laws do vary from state to state and could end up losing you some buyers if not navigated properly. About 9 states have this requirement. It’s important to check your local guidelines as some states don’t require disclosure at all for murders or suicides, some require disclosure if they happened in the last three years, and some require full disclosure for all times (especially if it was a violent or publicized death with a stigma attached). One common rule of thumb is simply to tell the truth if a buyer asks you directly as to whether or not a death has occurred on the property.
So, what if your home has experienced a suicide or murder? Don’t worry! There is a market for such haunted or stigmatized homes. It is sometimes similar to haunted hotel rooms that are sought out for their ‘mystique’… some people love it and still others don’t mind. Just make sure to disclose and maybe use it as a selling point! Every deal is a good deal at the right price.
Pest infestations can be a tricky disclosure. Not every state has this requirement but in the states that do, you have to be very careful to ensure you are disclosing properly and accurately. This is because not all pests need to be considered insects and some pests are not visible to the naked eye. Snake infestations, for example, classify as disclosable pest infestations despite not being an insect. Similarly, bedbugs and mites may also need to be disclosed even though you may not even know they’re in your home prior to physical inspection.
So too, if you’re selling an apartment, townhome, or condo (pretty much any house that may share a wall with another residence) it’s important to ensure a neighbor’s infestation hasn’t started creeping over to your home.
It can be tempting to add a cushion in your square footage disclosure (such as including unpermitted add-on footage in the square footage count), but these types of embellishments can lead to unnecessary problems. It’s crucial to report an accurate number when it comes to the sizing of your home since it not only affects how fair your pricing is, but could lead to things like additional roadblocks in the sale of the home, the sale falling out of escrow, or even lawsuits from both realtors and homebuyers at a later time. Rounding up may get you an extra couple thousand dollars at close of escrow but it can also lose you tenfold what you may make.
Also, it’s not just the interior square footage you need to worry about when it comes to selling a home; property lot footage is also needed for disclosure. Make sure to survey your property and settle any neighborhood disputes you may have regarding property lines. You could end up losing some square footage on your property if you allow neighboring properties to encroach on your property line for too long. In this case, it’s worth the surveyor fee to get accurate numbers and avoid costly consequences.
Neighborhood Issues Or Safety Risks
Although it’s not the law in every state, it’s good practice to disclose any sex offenders, halfway houses, or frequent criminal offenses in your neighborhood. Even things as small as continuous noise pollution can be a huge issue for you and homebuyers down the road.
Title Problems & Past Problems
Any kind of title problem should be disclosed. Whether it has to do with a short sale, liens, illegal deeds, or anything of the sort, it’s much easier to disclose than it is to fight the lawsuit.
Past problems, fixed or not, are important to disclose to the homebuyers just in case it occurs again. This can include things like structural issues, old leaks, or even the aforementioned property disputes. Even if you’re selling a home “as-is,” there’s no way around letting your buyer know what the house has to offer.
At Door&Key, we buy homes and would love to talk to you about yours! We pride ourselves in making fair offers and creating win-win situations every time. Don’t hesitate to see what we may have to offer you. Call today or fill out the form on our website. 833-387-7433