What are disclosures?
Disclosures are forms filled out by the seller which informs the buyer of any issues that the seller is aware of with the home. Disclosures are one of the most important parts of a real estate contract and completing the disclosures thoroughly and accurately can keep you out of a law suit. The specific disclosures that you will use will vary based upon the age of the home and where you live. Here's a list of some of the disclosures that you may encounter.
- HOA / Condo / CDD - This will be 2, or maybe even 3, different disclosures but it's purpose is to disclose fees which are associated with the property. You'll want to list any HOA or condo fees and in what time frame they should be paid (i.e., yearly, quarterly, monthly). Some communities will have 2 fees, one paid to the master association and another paid to the neighborhood association. You'll also need to disclose if there is a CDD fee for the community. Even though this fee is usually paid on the tax bill, it should still be disclosed separately.
- Lead-based Paint - If you're home was built prior to 1978 then you'll need to disclose if there is any known lead-based paint in the home. Lead-based paint has been found to be toxic if ingested so extra precautions should be taken if the paint needs to be sanded down or if young children will be in the home.
- Mold - If you are aware of any mold issues in the home then you'll definitely want to make the buyer aware of the issue. Mold issues occur when water is present for an extended period of time, possibly from a roof issue or punctured water pipe.
- Property Disclosure - This is the most in-depth disclosure. With this document, you'll want to list any issues that you are aware of with the property. Regardless of which version you use, it should ask you questions regarding plumbing, roof, electrical and other possible issues. If the home inspector find evidence of an issue that is not listed on the disclosure then it will definitely raise red flags. I advise my clients that if there has been a problem but it's been corrected then list the issue and write a brief explanation of the measure taken to correct it. It is usually better to over-disclose than under-disclose.
- Sinkhole - With this disclosure, you'll list if you've made a sinkhole claim or if you've found evidence of a sinkhole. If you've found evidence and don't disclose it then you're just opening yourself up to a lawsuit. If you've had a sinkhole repair done then the home inspector will probably find it when he looks at the permits that have been pulled on the home.
When does the buyer receive the disclosure statements?
Many times, buyers will ask for the property disclosure prior to making an offer. Sometimes the disclosures are presented after an offer is made or accepted on a house. Either way, the sellers and buyers must sign off on all disclosures.
Does a disclosure replace an inspection?
Disclosures are not intended to take the place of an inspection but rather to inform of the buyer of issues prior to the inspection, and many times prior to an offer. If a buyer knows that the AC doesn't work then their offer will likely be different than if it were working. If the buyer doesn't find out about a broken AC until after the home inspection then they will probably either walk away from the contract, ask the seller to repair it or try to renegotiate the price of the home.
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Are you thinking about selling a home in Tampa Bay? It's important disclose anything that materially affects the value of the home. Not certain exactly what all that includes? Let me help. I have been selling homes throughout Tampa Bay since 2005, put my experience to work for you. Contact me today! If you're not quite ready to sell your home but want to know an approximate value, you can also request a free market analysis.