What can you expect from a seller's disclosure?

If you've been in the market for a house for some time, you may be frustrated trying to find something you can afford that won't require a lot of repairs in a nice neighborhood. You may have visited some fragile fixer-uppers whose defects were pretty obvious, but what about the charming home with fresh paint and new carpeting?

Anyone who buys a house is taking a risk. Even a new construction has the potential for defects or faults that could cause you trouble or cost you money. This is why Texas and other states have disclosure laws obligating sellers to inform potential buyers of any known problems with the house and property.

What's under the surface?

You have a right to know what you are buying, especially if any damage or material defects in the home will cost you money in the future or reduce the resale value of the home. When you make an offer on a house, you will typically receive a copy of a disclosure form.

This is not an inspection, and experts universally recommend getting an independent inspection of the home before you buy. Instead, this is an overview of the seller's experience with the house, revealing any potential problems that may help you decide if you want to proceed with the purchase. Some examples of items a disclosure may include are:

  • Renovations and improvements, especially if the seller completed them without a permit
  • Known presence of lead paint, asbestos, radon or other hazards
  • Flood hazard
  • Termites
  • Malfunctioning appliances
  • Problems with major systems in the house, such as plumbing, electricity or foundation
  • Any bankruptcies or liens affecting the title of the property

Some states may require the seller to alert you of any trouble with neighbors, including property disputes or nuisance behaviors. Even if the law does not compel the seller to disclose certain information, an ethical agent or seller will answer you frankly if you ask a direct question about the condition of the house.

Full disclosure is always best

Most disclosure documents list a series of yes and no questions about the property. The seller will also include additional documentation for any substantial issues or defects that might negatively affect the property's value. If the problems disclosed alter your opinion of the house, you have the right to back out of the deal, especially if your inspector verifies the trouble you will buy into.

A seller may fail to disclose to you any serious defects or may lie to you about the condition of the home to ensure you follow through with the purchase. This may leave you with repairs that may cost as much as the house. When this happens, you will have a limited amount of time to seek advice and take legal action.

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