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What Do Sellers Need To Disclose?

Let's talk about Seller Disclosures and what is required during real estate transactions. What does it mean to 'disclose' in real estate transactions? Here in California, it means that a Seller must share any and all pertinent information that might be considered a 'material fact'. If any information that a Seller has about a property could be construed to affect the value of what a Buyer might pay for that property, this is what is known as a 'material fact.'

The way we approach disclosure information here is that if you have to ask me whether or not you should disclose something, the answer to that is almost always going to be a resounding "YES! - Yes, you should disclose that."

This is vital to ensure that you are safe from allegations that you failed to disclose pertinent facts - both during the transaction and after the sale closes. You don't ever want to be accused of omitting any material information.

Here in California, we have standard disclosure forms that are used for every residential property transaction. Using these standard disclosure forms actually provides a safety net

and checklist, not only for the buyer but also for the seller.

I highly suggest going over and completing these forms with the help of your listing agent;

and you should do it as part of your preparation phase, before the listing goes into the MLS

and before any buyers see the home. Here in the Bay Area, it's standard operating procedure for Buyers to review the disclosures prior to making an offer, this helps to ensure that the buyer doesn’t back out due to things that they should have already been made aware of.

I am happy to say that after selling hundreds of homes in the past two decades, I have never had a lawsuit, in fact, I've held risk management positions at multiple top brokerages and I've dealt with lots of complex disclosure situations.

When you are a Seller who is selling a property that has ever been repaired, replaced, modified, added to, fixed or changed - in any way - all of this needs to be disclosed. So if you’ve painted the walls, cleaned or changed the carpets, added new lighting or fixed the water heater - you need to disclose it.

Over disclosure is better than under disclosure and over disclosure will keep you out of the court room. Over disclosure also helps to make the Buyer more comfortable with what they are getting. You want the buyer to know anything and everything that YOU know about the home, the area, etc - anything that could have a negative impact on the desirability or price of the home needs to be shared.

When you disclose properly, you don’t have to worry about the Buyer coming back to you later and telling you they want to go to court or want to try to extract more money out of you.

Obviously you can only disclose what you know about. If there are issues with the property that you don’t know about then in order to win any court claims against you, the buyer would have to prove that you DID know and that you kept that information from them intentionally.

So disclose, disclose, disclose - it's better to be safe than sorry.

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