Disclosure

In some states, disclosure of defects is required as a statement provided by the seller. Any defects that the property has, or any personal situation, property encumbrance or neighborhood problem that affects the value of the home must be disclosed. Disclosure can cover maintenance items such as the roof needs repairing over the third bedroom, southern corner to garage door opener is missing. Other items for disclosure could include anything from a death that took place in the home, to airplane noise overhead, to zoning law changes in the neighborhood that could affect traffic, noise or values in another way. Some states, such as California, require environmental disclosure.

Some areas that are important to cover in disclosure are the who owns title to the home, environmental influences, structural aspects, mechanical features, and plumbing. Other disclosures could include broken locks, stains on carpets, and past pest infestations.

Where sellers' eyeballs really begin to spin are answering questions regarding settling, flooding, soil conditions and hazardous substances. Ditto questions about the water and sewage.

Many of these questions can be answered by having the home inspected prior to putting the home on the market. Not only will an inspection assist (but not take the place of) disclosure, it will give the seller a better idea of the repairs needed to put the home in better marketing condition.

If you belong to a homeowner's association, that needs to be disclosed along with monthly fees and obligations.

Insurance

You are also responsible for keeping up your liability insurance to protect you and potential buyers from injury on your property. Since many home showings take place without the home owner present, liability insurance covers you and your buyer should your Rottweiler escape and take a chunk out of the buyer's leg during a showing or inspection.

Performing to the letter of the Contract

The agreement to sell between a buyer and seller of real estate is governed by the general principles of contract law, according to U.S. Real Property Law, a Web site published by the Department of Law, Cornell University.

According to Nolo Press, a contract is formed when "either the seller or the buyer accepts all of the terms of the other's offer or counter offer in writing within the time allowed." Contracts are enforceable by law, so you are expected to perform by the terms outlined in the contract. You will need to work closely with an agent or an attorney to help you navigate changes in the contract should they occur. For example, the buyer may find something s/he wants you to repair and ask you to repair it. If you refuse, the buyer has the option, if s/he signed an inspection contingency, to back out of the contract. If you agree to make the repair, you must do it in a timely fashion. The only way you can get out of the contract is if the buyer defaults or you have included a contingency which allows you to default. One thing of which to be careful is removing fixtures from the home prior to closing that are assumed to stay by the buyer. Window treatments, ceiling fans, decorative hardware, built-in appliances are "fixtures," or part of the home. If you want to exclude them in the contract, you must include a clause that says something to affect of "draperies in master bedroom excluded."

You can't refuse to perform your part of the contract. Once the contract is signed, it is binding, even if you get a better offer. Meet legal responsibilities at the state level

Because every state has different laws and requirements, it would be wise to see an attorney or a real estate professional to make sure that you have met your legal responsibilities as a seller.

A disclosure form, obtained at the city level, will help lead you through the type of information that you will need to provide to meet your legal obligations.

Real Times Seller's Advice

Published: February 4, 1999

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