There’s a memorable phrase in the real estate profession of “Disclose, disclose, disclose. Those who don’t, don’t close, don’t close, don’t close.”
Its a smart rule to follow, and not just to make a sale. The National Association of Realtors Code of Ethics goes into some detail about what agents should disclose to clients, though there isnt much about rules for real estate disclosures about a propertys condition.
An agents role in conveying the sellers disclosure is pretty straightforward: Tell everything required by law, which vary by state and can go down to the city and county level.
The one area that federal law requires disclosure of is lead paint. If a home was built before 1978, it may contain lead paint, and a disclosure form must be completed.
The state and federal regulations are meant to disclose known facts about a propertys condition, including problems that could discourage potential buyers. These include leaking windows, being in a flood zone and if a murder happened on the site.
While a home inspection should turn up most issues and could turn up new issues that no one knew about, its legally up to the seller to tell buyers about problems they already know about a home.
Most states require real estate agents and brokers to sign a disclosure form listing everything material about the deal, under penalty of perjury.
A real estate agent representing the buyer has a duty to disclose information that would allow the buyer to complete the sale at the lowest price and at the most favorable terms for the buyer, and these can include home defects that need to be fixed.
But some things that come up during an inspection, for example, might not be the sellers obligation to address or disclose, says Louis Wolfs, an agent in Needham, Mass., in an online forum at Trulia.
Some issues may not meet current building codes but are working fine for the current owner, who isnt obligated to disclose them, Wolfs says. These can include older windows, railings that are low, a driveway needing repair and improper grading.
Sellers and their agents may not have to disclose such issues, but revealing as much as they can in a disclosure statement is only in their best interest in the long run if they dont want to be sued afterward for not alerting a buyer to something they knew about.
Disclose, disclose, disclose. Follow that mantra and you should be safe.
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Published with permission from RISMedia.