The number Seven of the top ten mistakes that home buyer's make is not getting a Seller's disclosure. A federal disclosure such as Lead-Based Paint is required for all transactions if the home was built before 1978.
Material Facts are commonly referred to as anything that would affect the buyer's decision to purchase or the price and terms the buyer offers. In other words, if you have knowledge about a defect, it should be disclosed. This can be difficult when the seller has lived in the home for many years. Hopefully, they have kept records to jog the memory...
In California, sellers are to notify buyers if a death has occurred on the property within the last 3 years. Some buyers are creeped out by knowledge that a seller died in the house.
Causes of Death:
Many home buyers are fine with news of a death occurring in the house as long as it wasn't violent or gruesome. There are also buyers who believe homes are haunted by former occupants who died in the house.
External Disclosures
Natural Hazard Disclosure The state of California has a standardized reporting format for the seller and their agent to comply with the law, as it is their responsibility to disclose:
- Earthquakes
- Natural Hazards
- Zoning Changes
- Flood Zones
- Fire Hazards
- Noise Pollution
- Ground Pollution
- Air Pollution, among others.
Due to the volume of lawsuits, the California Association of Realtors publishes a number of disclosure forms for buyers, some of which tell a buyer that if she purchases a home on a golf course, errant golf balls might break her windows. Why? Because a homeowner who bought on a golf course once sued for non-disclosure.
- The pipes once leaked.
- I paid ABC Plumbers $175 to stop the leak.
- The pipes have not leaked since.
Are the pipes good as new? I don't know. Probably not. I'm not going to guarantee it, however.
In lots of cases, home buyers are relieved if they know certain things have been repaired. There is a sense of security if the buyers know a seller has:
- Replaced a roof
- Upgraded electrical & plumbing
- Replaced the decking
Foundation Problems
In areas with basements, this is a huge issue, as are problems surrounding wet basements. But so are defective slabs. I represented a seller whose newer wood floor showed discoloration in spots. Was it due to moisture? The sellers didn't know. We simply removed the rugs, disclosed the discoloration to the buyer and offered a $5,000 credit for new floors, which the buyers accepted without further discussion or fuss.
What About Rumors?
Generally speaking, unless you will violate a state or local law by disclosing, if you have knowledge of a defect or material fact, then disclose it. If a neighbor repeated a rumor, and you have not verified nor disproved the rumor, you might want to consider telling the buyer about the rumor. Follow the Golden Rule. If you would like to know, your buyer probably does as well. Typically, buyers aren't upset by receipt of negative information. They get upset and call a lawyer when they feel they have been duped, deceived or lied to.
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