Q: Why Is the Seller’s Disclosure Notice So Important?

Here’s what you need to know about the seller’s disclosure form.

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The seller’s disclosure notice is a very important real estate document, for sellers and buyers. 

If you’re a seller, it’s important to take your time and fill this document out correctly. I abide by the philosophy that it’s better to over-disclose than under-disclose. If you have a question about whether or not you should disclose something, you’re better off disclosing it. Most buyers prefer that you tell them about something rather than having to find out about it after an inspection or the purchase. I have yet to see a buyer get upset about something a seller tells them about in advance. 

Water and fire damage are things you should always over-disclose. For example, water damage could mean a toilet overflowed and you had to redo the floors. If you fixed that leak and repaired the floors, you technically don’t have to tell anyone about it, but it’s better that you disclose that event. Water damage is a tricky subject that people can get upset about, and when they hire a contractor to fix something, they expect them to fix it completely and correctly. If they decide to remodel, tear down a wall, and find water damage, they’ll know the seller didn’t disclose something. 

The same goes for fire damage. There’s nothing like tearing down a wall only to discover charred beams. As you can imagine, that will elicit a host of questions. Again, you’re better off attaching an addendum to your disclosure. In the disclosure form, there’s a section inquiring whether you’re aware of any other problems in the home, and this is typically where I advise my clients to say no, but fire damage is an exception.

 

If you have a question about whether or not you should disclose something, you’re better off disclosing it.

 

Another important item many sellers overlook is insurance claims. You need to double-check whether your home has had any insurance claims. More importantly, if you got money for that insurance claim and didn’t use it for the purpose intended, don’t assume you can hide that fact. 

For example, many homeowners file a claim for a new roof but never follow through on installing it. They just put that money in the bank and think nothing will happen if they don’t say anything. That’s a big no-no. Insurance companies keep track of which claims were paid out, and new buyers can check whether the insurance company has concerns about anything regarding your home or whether anything was paid out. If they find something, you have a problem on your hands. If you got money for an insurance claim, whether you used it for its intended purpose or not, just be honest and disclose that. 

If you’re a buyer, the seller’s disclosure notice is important because that’s how you check on any concerns you have with the house and whether the seller has anything additional to tell you. Speaking of insurance claims, this is something you need to talk about with your insurance agent. 

Another issue to be aware of is whether there were any permits pulled. Sometimes homeowners make a renovation or build an add-on (e.g., a deck) without a permit; whether this is a big issue or small one depends on the renovations in question. 

Lastly, buyers and sellers need to know whether the property is in a flood plain or not. There’s a section in the seller’s disclosure notice about this, and many sellers misunderstand its meaning. They think it asks whether just the house itself is in a flood plain, but it’s asking about the entire property. For example, if part of your back yard is in a flood plain, that means you have to check “yes” for this section. If you’re a buyer, be sure to do your own due diligence and check the flood maps. 

If you have questions about the seller’s disclosure notice or there’s anything else I can help you with, don’t hesitate to reach out to me. I’m happy to help.

Categories: San Antonio Real Estate.