With 30+ states having set disclosure laws, your responsibility as a home seller isn’t just limited to whatever comes up in a home inspection. You also have to ensure that you make the buyer aware of any known issues—from pests and leaks, to loud neighbors and recent deaths.

Some states are more stringent on what you have to disclose to a buyer, but it’s still a good idea to tell them as much as possible so that you don’t get any unpleasant surprises years after you hand over ownership.

So what do you need to disclose, and what happens if you don’t? Follow along as we cover the basics of real estate disclosures from a home seller’s perspective.

What do Home Sellers Need to Disclose?

Home sellers should makes buyers aware of any and all issues that might affect how the buyer feels about the home or the area. Why? Because if they don’t, and the buyer discovers an undisclosed issue down the road (in some places, for up to 10 years after the sale), you could be looking at a lawsuit.

Remember, you are only required to disclose known issues, so you don’t need to go looking for problems. But you should be sure to think about whether you need to make the buyer aware of any of the following:

Household disclosures

  • Insurance claims or repairs for leaks, mold, termite damage, or other issues.
  • If there is any lead-based paint in the house.
  • If there has been a death in the home in the last three years.
  • If there are missing appliances, including hot water tanks, air conditioning units, or fans.
  • Upgrades or renovations to the property.

Neighborhood disclosures

  • If your home is part of a Homeowners Association.
  • Continual noises or smells in the community, such as airplanes or a brewery.
  • Any past property line disputes.
  • Unusually loud neighbors or animals.

Miscellaneous disclosures

  • If your home has ever experienced, or has the risk to experience, floods, earthquakes, or forest fires.
  • Registered sex offenders in the area.
  • And health hazards within the area, such as a history of issues with clean water.

Real Estate Disclosure vs Home Inspection

Real estate disclosures and home inspections are similar, but they should never be used interchangeably. While they do have a number of similarities, they are two separate documents that protect both buyers and sellers in different ways.

Real estate disclosures:

  • Are for informational purposes only. The seller is not required or obligated to repair or otherwise remedy any known issues listed.
  • Are provided after an offer is accepted, and may be used as a contingency.
  • Cover a variety of issues, both specific to the property and to the neighborhood.
  • Serve to give buyers an honest and clear understanding of the property.
  • Protect sellers from future lawsuits in relation to the property.
  • Are from the seller to the buyer.

Home inspections:

  • Lists issues in relation to the dwelling itself, such as electrical or structural damage, or construction that is not up to code as per the jurisdiction’s building requirements.
  • Should be arranged and paid for by a buyer, with a copy of the report provided to the seller.
  • Are conducted after an offer is accepted, and may be used as a contingency.
  • Give sellers a list of things to either repair, or compensate the buyer for, prior to completing the sale.
  • Are typically required by lenders.

As you can see, where real estate disclosures only require acknowledgement, home inspections generally require action. As with home inspections, just because the buyer is being given a list of issues, it doesn’t mean that it will affect whether or not they decide to purchase the home.

Buyers expect there to be problems, since no house is perfect, and they appreciate knowing beforehand instead of finding out after they move in. If they know that the home has experienced issues with a leaky roof at some point, they can prepare for that instead of being surprised if it happens again.

How do I Know What to Disclose?

Don’t worry, you aren’t expected to know everything about your state’s disclosure laws, or whether you need to disclose the fact that the neighbor’s dog howls during thunderstorms. Your real estate agent should be able to help you figure out what you need to disclose, as well as provide you with the necessary documents.

There may also be some things that you don’t have to disclose legally, but that you may feel morally obligated to disclose, such as any recent crimes in the area.

In some states, you don’t need a full disclosure document, instead, if the home is sold “as-is”, the buyer can sign a waiver that releases the seller from any future liability.

If you don’t disclose something that you should have, the buyer could come back to you after the fact, and you may be financially liable at best, or facing a lawsuit at worst.

Don’t Just Tell; Show

It’s not enough to simply tell a buyer what they should be aware of. You need to create a written disclosure statement through your real estate agent, and then both you and the home buyer need to sign it after any and all questions have been answered and you are on the same page.

Keep your copy of the disclosure statement in a safe place for as long as your jurisdiction recommends. In some places, this can be for up to 10 years. Also be sure to have one for each and every property that you sell, whether it is brand new, or previously owned—even newly built homes can have problems such as mold and structural damage.

Happy and Healthy Home Sellers and Buyers

As a seller, the disclosure protects you by ensuring that you aren’t held responsible for anything that goes wrong in the home after the deal has gone through. It protects buyers by giving them a clear and honest picture of what the property truly looks like, both inside and out.

These factors make for happy, healthy, and satisfied home sellers and buyers, ensuring that each party is protected, aware, and in agreement so that everyone gleans as much enjoyment from the transaction as possible.

Have you ever been a victim of an undisclosed real estate issue? Do you always provide disclosures when you sell?

Posted by Brittany Foster

Brittany is a writer, editor, and content manager interested in law, marketing, and technology. She's been writing for LawDepot since 2014.