Full Disclosure or TMI: What Should Home Sellers Disclose?
If you're selling a home that might have four-legged, stripey-tailed tenants in the chimney, will you be sued if you don't tell the buyer? What if your next-door neighbor told you that a former owner murdered his wife there and she's been haunting the place since the 1960s? Do you have to tell the buyer about the haunting – or about the creepy neighbor?
In most situations, the best way to avoid a lawsuit from a potential buyer is to tell them about anything that might affect the value of your property. Otherwise, you risk the buyer coming after you for deception.
Home Seller Disclosure Obligations
There are some things that you have to disclose to someone who is going to buy your home. The law varies by state, but here are some of the most common required disclosures.
#1) Lead Paint
According to federal law, if your home was built before 1978, you have to tell a buyer everything you know about lead paint on the property. You also have to give the buyer an EPA-approved document about lead protection and confirm in writing that you've obeyed all the lead disclosure rules, like the good little non-lead-poisoned homeowner that you are.
The law also requires agents selling older homes to recommend lead inspections within a 10-day time frame. Either you or your buyer can make that period longer or shorter, and your buyer can waive the right to an inspection.
#2) Structural Problems
We'll say it again – if you know of anything in the house that might bring its value down – a leak, old wiring, an alien abduction on the property in 1992 – tell your buyer! The law usually requires it.
Also, if you're pretty sure there might be something wrong, look into it. The law requires you to disclose information you should have known. If your socks get wet every time you go down to the basement after a rainstorm, “I thought bad weather made my feet sweat” will not be an acceptable excuse.
#3) Pest Infestation
If your state doesn't require pest inspections, you probably don't have to pay for one if there's no evidence. On the other hand, if your appraiser said that you might have rats or bedbugs or dry rot, hire an expert. Even if the results come back negative, you'll be glad you can show that report as proof.
Get to Know the Law
Fun fact: In California, if a buyer asks if anyone has died on a property, the seller has to disclose no matter how long ago the death occurred.
It would take a whole book – or perhaps more – to detail all of the disclosure laws in every state, so take the time to learn about yours. There's no short answer to the question “What should home sellers disclose,” but you also can't get away with claiming that you didn't know about a particular disclosure requirement.
Don't get sued because you didn't know you had to tell your buyer about that murder-suicide pact that played out in your living room before you bought the place. It's really not worth it. Learn more about all things buying, selling, and searching for homes on our website.