It’s standard practice in real estate to give a home a fresh coat of paint before putting it on the market. Nine out of 10 times, the intention is to show the property at its best. But every so often, the seller paints the house in hopes of covering something up.
That’s why I always triple-check the disclosure documents of newly painted houses, to ensure there were no recent leaks or other damage. It’s the seller’s obligation to disclose these kinds of issues. And it’s the buyer’s responsibility to be completely aware of past problems before signing on the dotted line.
Whether you’re a buyer or a seller, here are five things you should know about real estate disclosures.
What is a disclosure?
Disclosures are legal documents that are filled out by the seller and educates the buyer on the property with the seller’s experience with the property.
This can range from anything small such as a squeaky door knob to construction in the neighborhood. This is the seller’s chance to inform the buyer to anything that is negative about the property that can effect the value and the enjoyment of the house.
Depending on where you live, sellers can be on the hook for what they disclose (or fail to) for up to ten years. I’ve seen agents and sellers take all types of approaches when dealing with property disclosures. More than anything, I always tell sellers to err on the side of caution. If you know it, disclose it. If you try to hide something, it can come back to bite you long after the sale and it is just not worth it.
Disclosure typically comes in the form of boilerplate documents (put together by the local or state Realtor association), where the seller is responsible for answering a series of yes/no questions detailing their home and their experience there.
Aside from the boilerplate documents a seller is required to complete, if there is any written (or sometimes verbal) communication regarding something negative about the property, it should be disclosed to the buyer. For example, there was a property for sale with a dispute over a tree on the property line and whose responsibility it was. The neighbor faxed a letter to the seller’s real estate agent documenting the dispute. This immediately became a disclosure item that both the seller and buyer needed to sign off on.
What is usually disclosed to a buyer?
Here are some examples of things that are on the SPDS:
This is a small example of what is on the SPDS and will be much more in depth when it is time for the seller to fill it out.
A disclosure is something given to the buyer by the seller documenting their knowledge of the property. It is not the same thing as an inspection; because there are things the seller may not be aware of that an inspection brings to light.
This is why a property inspection should always be done by the buyer while in escrow. The inspector will check the property out from top to bottom, many times verifying what the seller has disclosed but sometimes bringing to light new issues. Often, we will see sellers hire a property inspector before going on the market. It seems backwards, but this is the sellers’ opportunity to hire an independent party to inspect the property, in case they missed or were not aware of something.
When will I receive the disclosure form the seller?
Usually a buyer receives the disclosure documents after the contract has been accepted. Sometimes the seller makes this available before it is under contract. This saves everyone time, if there is something negative on the disclosure the buyer will know up front and the parties will not have to risk a deal falling apart. Buyers are required to sign the disclosure documents and reports. It is important for the buyer to ask any and all questions about the disclosures.
Whether you’re a Joliet IL home buyer or the home seller, you’ll need a qualified and experienced real estate agent. Jeff Gregory is Joliet’s premier Realtor. Contact Jeff today for all of your Joliet IL real estate needs.