A property disclosure statement is a document that details particular flaws that sellers and their agents know about that could negatively impact the value of the property being sold. In most countries, most states require this type of document. This way, buyers would be fully aware of a property’s bad and good points before closing a deal.
What Should a Property Disclosure Statement Disclose?
The law requires sellers to complete various property disclosure statements that list down specific property information such as:
- Doors or windows that get stuck or don’t close properly;
- Leaky roof;
- Faulty foundation;
- Issues with home systems or major appliances such as HVAC;
- Renovation projects completed without proper permits;
- Home repairs and insurance claims;
- Mold or pests infestations; and
- Area-specific environmental hazards including wildfires or floods.
The government likewise requires specific property disclosures in the United States, such as the existence of asbestos, lead-based paint, and other obvious safety and health risks, according to a top real estate agent in Cockeysville, MD. Some states and counties likewise require that sellers disclose any sexual offenders living close by and any death that occurred in the property, particularly if it involved murder. If you and your agent reviewed a property disclosure statement and confirmed everything’s in order, you could sign off on the statement and be a step closer to closing the sale.
What If You See Something Bad on The Property Disclosure Statement?
If you don’t understand something or if you see anything bad on a property disclosure statement, get your agent to discuss your concerns with the seller. If you want the property regardless of what the disclosure statement says, you could also try negotiating a lower purchase with the seller to offset whatever repairs you might need to do on the property.
If you don’t want to take on the risk, you could also back out without being penalized; you’ll even get your earnest money deposit back. Do note however that sellers are only required by law to disclose problems they know about their property, meaning that you can’t hold them responsible for property issues they don’t know about. With this in mind, do your due diligence and make sure to have the property inspected professionally to determine any potential issues before signing on the dotted line.