Jon and Leslie Foster

What Things Should You Disclose When Selling A Home?

What Things Should You Disclose When Selling A Home?

Another complicated thing about selling a home is the issue of what you and your real estate agent need to disclose. You really want to sell your house and at the best possible price. But on the other hand, you don’t want to be a sneaky seller and feel like you are deceiving anyone. It can be quite confusing because you have to find the right balance between the two. It can also be quite scary to think that some of the home’s issues can be a deterrent to your prospective buyers.

There’s also this general rule in buying and selling real estate known as the “caveat emptor,” a Latin phrase which translates to the term “let the buyer beware.” It means the buyer assumes the risk of purchase. So depending on where you live, you may or may not be required to disclose unique issues about your home.

The key is to knowing the things that you are legally required to share to your potential buyers. Disclosure regulations vary by state, so be sure to coordinate well with your real estate agent about these matters. Failure to disclose certain issues in accordance with either government or state laws can leave you vulnerable to future hefty lawsuits. Here are some of the issues and information you need to tell buyers:

1. A stigmatized property

If you are selling what is known as a stigmatized property, which is a home or a dwelling where unfortunate events or issues happened, then you may or may not be required to disclose such issues to potential buyers. These events may include a suicide, murder, other deaths, criminal activities, well-known adulteries, and other misfortunes. It’s crucial that you seek help from your real estate agent on whether revealing these kinds of things is necessary before you make a sale.

  • Murder and/or deaths on the property

As a seller, you may have to disclose any murder or deaths that occurred on the property. This disclosure depends on where your home is located and whether the death took place in a certain number of years. In the state of California, for example, laws require sellers and real estate agents to disclose any deaths that occurred on the property in the last three years. Yet, in Florida, state laws don’t mandate such disclosure at all.

There may be a few buyers who will feel uncomfortable knowing that a death recently took place in their prospective home. So it’s a good idea to check the local laws about these matters.

  • Hauntings or any paranormal events

Another kind of stigma in a home is if it is considered “haunted” or if it’s known for “ghost sightings” and other paranormal activities. Again, laws vary from state to state as to whether sellers and real estate agents should disclose reported hauntings. But regardless, being upfront and telling potential buyers about mysterious things happening in your home is paramount. While some buyers don’t believe in ghosts, others may be quite uncomfortable and would not dare come near a haunted home. Likewise, if you have had an exorcism done to your home, you are also obligated to disclose that info on the buyer’s side. Anyway, it won’t prove to be a deterrent if potential buyers are skeptics and are not convinced about such paranormal activities, or if they are paranormal enthusiasts themselves. In some cases, sharing details of the hauntings in the home actually helped sell it. (However, one disadvantage of listing this kind of stigmatized property is that it might also lead to more phone calls from many thrill seekers or amateur ghost hunters instead of serious buyers.)


2. Pest infestations (e.g. termite damage)

While a house can look perfectly fine from the outside, hidden areas of the home could well be invaded by pests. Most states require sellers to disclose any sort of pest infestation or issue in a home, no matter how big or small the problem is. There could be termites, snakes, mice, raccoons, rats, bedbugs, and other dangerous pests crawling in the home without your knowledge. If your home has been treated for termites before you list it for sale, you still have to let your potential buyers know about it. It is also a good idea to disclose information about pest issues in your area even if yours isn’t specifically infested. That way, it won’t look like you were being sneaky and you can’t be accused of withholding crucial information in case problems arise. For buyers, it would also be wise to have a professional pest inspection performed on a house that you are interested in.


3. Lead-based paint

The use of lead-based paint is a mandatory disclosure in all states. It’s one issue that you must be upfront with about to all buyers because it is required by federal law. Under the government’s Residential Lead-Based Paint Hazard Reduction Act of 1992, anyone who is selling a home that was built before 1978 must disclose all known information about lead-based paint and hazards in the home. If you fail to comply with these disclosure requirements, the buyer can sue you for triple the amount of damages that they actually suffered because of the lead-based paint. Your real estate agent must also provide buyers a pamphlet prepared by the US Environmental Protection Agency (EPA) titled “Protect Your Family from Lead in Your Home.” This guide offers tips and reminders on how to keep their family and children safe from lead-based paint. Under this law, buyers also have 10 days to test the house for lead.

Even if you think the lead paint has been removed from your home, you still need to disclose it. You should also keep signed acknowledgments for a minimum of three years as proof of compliance. However, if you are not aware of a lead-based paint issue in your home, then you are not required to conduct testing as a home seller.


4. Other known toxic materials

Aside from lead-based paint, there are other materials that are considered hazardous to a person’s health. If a seller is aware of the existence of one of these issues in their home, they should disclose it to would-be buyers.

  • Asbestos

Asbestos is known to be an extremely toxic material that can cause lung cancer and other serious health problems if its fibers are inhaled. It is often found in older homes, usually as a thermal insulation on basement broilers and pipes, or even in vinyl floor tiles. Depending on your state, you might be required to disclose the presence of asbestos in your home. However, there can be an exception if it’s hidden away in areas in your home that can’t be easily accessed by inhabitants.

  • Radon

Radon is a toxic gas that rises from the ground and can seep through the home’s cracks, holes, foundation, and up through the basement. It can cause lung cancer after prolonged exposure and can also contaminate well water. Radon testing is commonly requested by potential buyers to be performed as part of the overall home inspection. The EPA also recommends that all houses be tested for radon at the point of sale.

If homeowners find they have high radon levels in the home, they may pay for professional mitigation services. Most states also require that the test result be disclosed as part of the house disclosure that sellers need to fill out with their realtor. It’s all the more necessary to disclose this information if you know your home has high radon levels, but haven’t paid for professionals to solve the problem.


5. Water damage and drainage issues

Yes, you need to disclose water damage and drainage issues when selling your home. There’s no point of keeping it a secret as it could lead to bigger problems for you later on. When water has entered a home, it can easily lead to mold, which is another issue that you need to inform your would-be buyers. Make sure that you disclose if you have a flooding basement, drainage issues, or standing water in the backyard.  


6. Mold

Mold problem is another big issue that sellers need to disclose. While in fact every home has mold, there are different types of mold. Most mold is harmless, like the common household mold. However, there are certain types that are toxic and can cause illness or respiratory problems, especially the toxic black mold, also known as Stachybotrys. Many states require sellers to disclose mold issues. And even if you have had mold remediation done in the past, you still need to disclose it or face a hefty lawsuit if you don’t.


7. Neighborly disputes or boundary issues

What may seem like a small neighborly dispute to you might escalate and become a major issue when the property gets passed along to a new owner. If you have had disputes with your neighbors about property lines, such as if your fence extends over your neighbor’s or your tree overhangs in their backyard, then you need to let buyers know. It isn’t something you should keep from the home’s prospective new owners. And while it may not be required, you should also inform them about any other issues you have with the neighbors, especially if they are those who keep blaring loud music and parties or have aggressive dogs barking loudly late at night.


8. Sex offenders

The laws on whether or not you have to disclose a sex offender living near your area vary by state. You should check with your local real estate agent or visit the police department to find out your area’s rules.


9. Noise pollution and other environmental hazards near the home

Any issues that could affect the marketability of the property need to be disclosed, including environmental hazards near the home and other off-site conditions. If there are waste plants and other contaminants near your area, you need to let buyers know. In some states, a disclosure is also required if the home is located in an earthquake zone, in a flood-prone area, or if the surrounding area is prone to wildfires, such as the case in California.  

Likewise, if you live in proximity to an airport or railways, you should also inform buyers that there could be times in the day where things get noisy. You need to disclose this information despite the fact that the loud noises could affect the buyer’s decision in purchasing the home.


10. Roof and foundation issues

Another issue that you need to disclose is if you have damaged or a leaky roof, especially if you haven’t repaired it. But most buyers will want to know the age and the condition of the roof anyway, so they will surely ask such important questions. An issue with the roof will also be discovered by the home inspector, so there’s really no reason to hide anything. It’s also a good idea to repair or replace a bad roof. Even if it proves to be expensive, you can save yourself from all kinds of headaches prior to closing your home sale.

You can also have the same scenario if you have major structural problems, such as a cracked, damaged or sinking foundation. Foundational problems can be time-consuming and costly to take care of, but those aren’t something you are legally allowed to keep from the buyer. Those issues will also be found in the home inspection and even in the home appraisal, so it’s better to disclose these problems from the beginning.


11. Square footage

The square footage of a home is typically published in the Multiple Listing Service when the home is listed for sale. However, the indicated square footage is often wrong. Both the seller and the real estate agent should take the necessary steps to validate the size of the home and provide accurate information. Listing the actual square footage is a controversial area of disclosure in real estate so it is something that sellers shouldn’t take too lightly.


12. The age of HVAC system and other appliances

It’s important for buyers to ask about the age of the heating and air conditioning units of the home. But even if they don’t, it is still the responsibility of the seller to disclose these things just in case there are major problems that future owners might encounter. Old and outdated appliances and HVAC systems can be less efficient and may not perform well anymore. On the other hand, it is also an advantage for you as a seller if you will highlight newer appliances and HVAC systems because they can be a major selling point of your home.


13. Repairs and improvements made to the home

Sellers should be aware that they should disclose any significant repairs they made to their home, especially those that required a permit. It is especially important just in case an issue resurfaces a few years after the buyer purchased the home. Some of these significant repairs include anything related to the roof, heating system and air conditioning, or even plumbing and electrical systems.


If you think you can get away with withholding important or mandatory information, think again! At the end of the day, it’s better to be transparent and be upfront to your potential buyers. If you fail to disclose, there’s a good chance that the buyer will find out about it later on—either before closing on the home or after they’ve become the new homeowner. Whenever it is, you will still face the repercussions of your actions. In a lawsuit against the seller, buyers are entitled to compensation for any necessary repairs and damages. You definitely don’t want to find yourself in a hot water later on just because you withheld crucial information to the home’s next owner.

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