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5 Potential Items For Disclosure in Real Estate

By Bill Gassett | December 16, 2022

In most states, providing a seller’s disclosure is commonplace when selling a home. Disclosure statements are required to ensure the buyer has a better understanding of what they are spending hundreds of thousands of dollars on.

But what do you need to disclose to the buyer? We will examine five disclosures you might consider making to the potential buyer.

Some of these items are not required to be disclosed in many states. Regarding disclosure laws, real estate agents and sellers must know their local laws.

Buyers should also be up to speed as to what's required. Let's dive in.

Sexual Offenders in the Neighborhood

If there are sex offenders or predators in the neighborhood, a potential buyer will understandably want to know about it. But are you required to give this information in the seller’s disclosure? The answer is you're not.

Thanks to Megan’s Law, sex offenders must register with the local police department. This information must be made available to the public, which can be checked on the National Sex Offender Public Website.

However, the seller usually doesn’t need to put this in the seller’s disclosure. If the seller doesn’t know about sexual predators in the neighborhood, they can’t reveal something they don’t have any knowledge of, even if the buyer asks.

If you know about sexual offenders nearby, it's unlikely there is a requirement to reveal this. But even if there isn’t, it might be a good idea to provide this information anyway to show the buyer you are trustworthy.

Buyers should also consider searching for sex offenders near me or similar search. A Google search will provide websites besides the sex offender registry that can be used to check.

It is also wise to contact the local police department for any known offenders.

Death in the Home

A death in the home could make the property harder to sell and mean the price has to be reduced to find a buyer. If there has been a death in the house you are trying to sell; you probably won’t be required to reveal this in the seller’s disclosure.

However, this depends on your location and the type of death. If you are located in California, this information will need to be provided for any death that occurred in the last 3 years.

In other states, a high-profile murder or suicide can be considered to stigmatize the property, affecting its value. However, sellers in most states are not required to disclose this information.

From a seller's standpoint, it doesn't make sense to voluntarily give out this information as it could make a home harder to sell and reduce its value.

In any case, if the buyer asks about any deaths in the home, you need to answer truthfully. If you don’t, there could be legal problems later.

Basement Flooding

With a flooding basement issue in the home, you will need to reveal this to a potential buyer unless you are in a non-disclosure state. In disclosure states, it must be disclosed if the home has suffered from flooding in the basement or other water damage.

Flooding in the basement is considered a material fact that could affect its value or change the buyer’s decision to purchase.

Basement flooding isn’t something you could be ignorant of if it happened when you lived in the home. You could be sued if you fail to tell the buyer, and they later discover this problem.

Real Estate agents must always disclose known water issues, whether in a disclosure or non-disclosure state. Agents are held to higher standards than consumers.

Environmental Hazards Nearby

If there are environmental hazards on the property, these should be disclosed to the buyer. But if there are potential environmental dangers nearby the home, the requirement for disclosure is less clear.

In California, for example, sellers are required to reveal potential environmental hazards. The Natural Hazard Disclosure Statement requires the seller to detail risks from earthquakes, floods, fires, and more.

However, in other states, there may not be a requirement in the law to disclose this type of information. But if your home is in a flood plain, on or near a landfill site, above underground pits or mines, or if there are other issues in the area, you might need to check if the disclosure is required.

Lead Paint

Lead paint was commonly used in homes until it was realized the harm it can do, mainly affecting young children. Unfortunately, young children often eat flaking or pealing paint found on window sills and other trim.

While the use of this paint has been outlawed for a long time, some older homes could still have lead paint on the windows, walls, or doors.

If you know that lead-based paint is present, perhaps from testing, you must disclose this to the buyer.

Any home built before 1978 has to have a Federally mandated lead paint disclosure signed by the buyer and seller. Sellers must reveal whether or not they have tested for lead paint and if it is present.

If a child under the age of six will be living in the house, it must be remediated. Not doing so could present serious legal ramifications.

Real Estate agents are required by law to have the form executed by the buyer and seller.

Final Thoughts on Real Estate Disclosures

While trying to hide something from a buyer might be tempting, doing so can have serious consequences. Most states encourage sellers to disclose their home's condition proactively.

If you don’t do this, there can be a presumption of guilt, increasing damages awarded to the buyer.

You can discuss this with your real estate agent if you are unsure, though they are also obligated to reveal known defects about the home to the buyer. A local real estate attorney can also help you with your disclosure when it is mandatory in your state.

It is normally better to disclose issues you know about, even if there isn't a legal requirement to do so. It's called doing the right thing.

Bill Gassett is an authority in the real estate industry with 38 years of experience. Bill is well respected for his informative articles for buyers, sellers, and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, the National Association of Realtors, Inman News, Newsbreak, Credit Sesame, Realty Biz News, and his own authoritative resource, Maximum Real Estate Exposure. He has been on of the top RE/MAX agents in New England over the last two decades.
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