Many people mistakenly believe that Seller’s Disclosure only benefits the buyer, but there is significant benefit to the seller in making disclosure.
But first, let me point out that the fact some people think this way means we have to add it to the list of potential dangers for a buyer who is working directly with an owner.
Did you know Seller’s Disclosure is not a Realtor requirement? It is required by law, whether you are working with a licensed real estate professional or not.
A seller’s disclosure is a legally required statement that discloses important or relevant information to a real property buyer. A seller’s property disclosure form is governed by state and federal laws.
It is easy to understand how the seller’s disclosure can protect the buyer. When the property condition is disclosed, the buyer can make the purchase decision based on the facts, rather than on the hope that everything is great. Or the false hope that all is well, when in reality there is a defect that will become apparent later.
Some sellers don’t want to disclose defects because it could affect the price.
Well, yes. It could, and likely should, affect the price. But it may not prevent an offer; kill the sale at inspection; or worse.
Consider if you were the buyer of a used car, and the odometer had been rolled back (youngsters, just play along like you know what that means).
The value of the car is less than portrayed because of the higher actual miles. If the person who sold you the car hid the fact the mileage was wrong, they committed fraud, and you could take them to court.
The court looks at two main things:
1.) Was the buyer harmed (in this case, yes)
2.) Did the seller intentionally commit the fraud?
If the seller was also a victim of odometer fraud, and unknowingly bought the car, and subsequently sold it without knowledge of the fraud, then they would have to take that up with the person they bought it from.
And by “take that up with” I mean, “take them to court”.
If the seller made the buyer aware of the incorrect mileage, the buyer may still have bought the car, and the seller would not have to look forward to attorney and court costs.
That is the benefit of disclosing known defects. Without a required seller’s disclosure, a seller can be held liable.
I always tell my sellers, “Disclosure is lawsuit protection. You cannot be sued for things that you disclose, but you may be sued for things that you conceal.”
Protect yourself and disclose as required by the laws in your state. Laws vary.
Florida law provides that, with some exceptions, you (as a home seller) must disclose any facts or conditions about your property that have a substantial impact on its value or desirability, and that others cannot easily see for themselves (This comes from the court case of Johnson v. Davis, 480 So.2d 625 (Fla. 1985)).
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All the Best!
Jim Sweat, ABR, CLHMS, CRS, CDPE, GRI, e-PRO, ILHM
Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)
Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™”
Re/Max Alliance Group
http://myfloridahomesmls.com/JimSweat (Home Search)
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