MARYLAND SELLER'S DISCLOSURE FORMS: DISCLOSE, DISCLOSE, DISCLOSE
If you are a Maryland homeowner and are contemplating selling your home in the near future, you need to be aware of the Maryland laws that govern disclosure of information regarding a residential property to prospective buyers. My first suggestion is to hire a seasoned real estate agent who knows the ins and outs of the market and how to guide you through the real estate process. Selling your home is a serious matter and you do not want to put yourself at risk because you did not properly disclose information about the history of your home.
Maryland law requires that a Seller:
1. Provide a Maryland Residential Property Disclosure Statement to prospective Buyers disclosing defects or other information about the condition of the property actually known by the Seller or;
2. Sign a Maryland Residential Property Disclaimer Statement which states that the owner is selling their home "as is" and makes no representations or warranties as to the condition of the property or any improvements on the real property.
As for latent defects, every Seller must disclose information that a Buyer would not be able to ascertain or observe through a visual inspection or may pose a health or safety threat to a Buyer or occupant of the property. There are a few caveats to the rule above where neither a disclosure or disclaimer statement are required. For example new homes, bank sales, foreclosures, tax sales, homes that are exempt from property taxes, a sale by an administrator, unimproved land - these owners do not need to fill out a Maryland Residential Property Disclosure Statement or Disclaimer Statement.
When filling out the Maryland Property Disclosure Statement, Sellers should consider the following points:
1. Buyers read disclosure statements in great detail before purchasing a house. If a Seller lives in the property and signs a disclaimer, most Buyers will run for the hills because they think there are hidden problems in the house. Buyers will make offers as if your home is being sold "as is." Don't be afraid to disclose the history of your home. It is what it is.
2. Disclose, Disclose, Disclose - you have to disclose everything you know about your home since you have lived there. From the age of the roof and systems to the dates of any leaks or fires, even if you have repaired, replaced and revamped, you must disclose. A good home inspector will detect most past problems and shoddy repairs. The discovery of secrets will make Buyers question a Seller's integrity.
3. Do not be vague! This is very straightforward. Provide details of events and when and how they were handled. If a prospective Buyer is turned off, it's better to know early then at the settlement table!
4. Insurance Claims - Have you made any insurance claims? When a buyer goes to get home insurance, they will discover any claims you have made on the property. If you haven't properly disclosed this information, you are going to have problems.
5. A smart agent will never fill out a Residential Property Disclosure Statement - end of story. This is real estate 101 and the job of a Seller.
6. If you have an issue with the house when it's on the market - let's say your dishwasher breaks, then you need to update your disclosure form.
7. If your home has been on the market for over a year, review the disclosure form and initial and date so prospective Buyers know the disclosure is current.
8. If you are in the middle of a transaction and need to provide the buyer with new information, you need to know a buyer has 5 days to cancel the transaction. This can be costly to a Seller that is relying on a settlement for funds.
The bottom line is to Disclose early and Disclose everything! You will sleep better at night!
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