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What is a Seller Not Legally Required to Disclose in Real Estate

By
Real Estate Agent with RE/MAX Executive Realty 91362

In real estate sales, there can be many gray areas. One such topic is what's necessary to disclose. Sometimes it can be challenging to know what must be disclosed in a real estate transaction.

As a general rule in most states, issues should be disclosed if something materially impacts the market value. However, there are a few exceptions to this rule which we are going to cover.

A few items are likely excluded from being disclosed whether you are a real estate agent, seller, or landlord. Every state has different disclosure laws, so it is essential to check your location.

Let's go over what probably won't need to be disclosed in your state.

Things You Probably Don't Need to Disclose as a Seller or Real Estate Agent

  • Sexual offenders nearby
  • Haunted house or paranormal activity
  • Death, whether by murder or suicide

Disclosing a Sexual Offender Near Me

One question that often arises is whether sexual predators or sex offenders need to be disclosed.

It is not uncommon for prospective buyers to search for sexual offenders near me when looking for a home in a specific location. Maximum Real Estate Exposure has an informative article on everything you need to know about sex offender disclosure.

Understanding who lives in the surrounding area becomes even more paramount when someone has young children.

For parents with children, learning that a sex offender resides nearby can be alarming. Before investing in a property, conducting thorough research on the area is highly recommended.

The disclosure of sex offenders is not always a topic that needs to be brought up during buying or selling a home. Most sellers are not going to volunteer this information to you.

It would be like a seller saying to you, "here is why you should not buy my house."

Most sellers will not be putting sexual offender information on their disclosure statements. In fact, they may not even know if one exists. Many people do not.

The best thing a buyer can do when they are worried about a sex offender living nearby is either to go to the local police department and ask or use one of the sexual offender search sites.

Haunted House or Paranormal Activity Disclosure

In many states, disclosing stigmatized property is unnecessary, including here in Massachusetts, where I'm located.

For some, haunted houses are seen as folklore resulting from overactive imaginations.

Ghost hunters maintain that paranormal activity is a prevalent phenomenon; many popular TV shows support this belief. However, state laws have yet to catch up to what some maintain as reality, making it difficult to prove and leaving homeowners and real estate agents protected from potential legal action.

Despite some believing in paranormal activity, many individuals rely on their judgment when purchasing a home. Of course, some folks regret their decision after living in the house for a while.

A simple online search may provide helpful insights for those seeking information regarding potential paranormal activity at a particular property.

By inputting the property's address into a search engine, one may find any available reports related to any alleged paranormal activity.

When homes look normal otherwise and seem to be priced attractively, there could be another underlying issue worth investigating.

Disclosing Death By Murder or Suicide

Some folks would not even consider purchasing a home where a violent death occurred.

In most states, there is no legal requirement to disclose if a death has occurred in a home. For certain buyers, knowing the proper steps to uncover if someone passed away in the residence may be an essential part of the research.

Someone being murdered in a home can create an unsettling and lasting feeling for some potential home buyers.

Of course, passing away from natural causes happens too.

Passing away from lack of health in the comfort of one's home is not unusual; it is a scenario that happens frequently.

For many, dying peacefully surrounded by family members at home may be preferable to passing away in a hospital setting.

On the contrary, a violent murder could be a deal breaker for many. Even suicide can be unsettling for many to think about. If the death history of a property you're considering is a concern, you'll need to do some research.

Your buyer's agent should be able to offer assistance in helping. There are also a few websites you can search to discover deaths in a property.

Seller's Disclosure Statement Explained

In many areas of the country, it is commonplace for a real estate agent to have a home seller fill out a property condition statement or seller's disclosure.

These forms contain disclosure information to the best of the seller's knowledge. The purpose of these forms is to let buyers know about defects in the property.

Some states do not have a mandatory disclosure requirement, but sellers fill them out anyway.

Real Estate agents encourage filling out these forms in detail to help limit potential liability in the future.

For example, if a seller states on the disclosure form that they get water in the basement, it will be challenging for a buyer to sue for this problem.

Most sellers will not put the issues discussed here on their disclosure statement. Since this is the case, you'll need to have some additional due diligence performed if these items cause distress.

Examples of Things Real Estate Agents Likely Need to Disclose

There are some things in most places that will need to be disclosed to potential home buyers. Some common examples are as follows:

  • Lead paint - there is a federal law that lead paint must be disclosed in homes built before 1978.
  • Mold - if you know the presence of mold exists or has existed, it should be disclosed as it can cause health issues.
  • Significant repairs and renovations - when extensive repairs are made to a property, they should be disclosed to potential buyers.
  • The existence of a homeowners association - a buyer, should know upfront when there is an HOA, as they will be making decisions an owner must follow. These are often referred to as restrictive covenants.
  • A hazardous environmental issue nearby - if something close to the property could impact a buying decision, it should be disclosed.

Final Thoughts on Disclosure

Real estate agents and sellers must know the disclosure laws of their state. Non-disclosure of know problems can create expensive legal issues.

If you are a potential buyer moving out of state, remember that disclosure laws may differ from where you're coming from.

Above all else, real estate agents need to be honest with the public. When questions are asked about a property, an agent must always be truthful.

 

Posted by

With three decades of experience, Bill Gassett is an authority in the real estate sector. Bill writes informative articles for numerous prestigious real estate sites to help buyers, sellers, and fellow real estate agents. His work has been featured on RIS Media, the National Association of Realtors, Inman News, Placester, Realty Biz News, Credit Sesame, and his own authority resource, Maximum Real Estate Exposure. Reach out to Bill Gassett for his real estate, mortgage, and financial expertise.

Comments(7)

Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Thank you for sharing the information. Wishing you continued success.  Have a wonderful day and sell a house.  Bill

Dec 15, 2022 07:13 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Hello Bill... disclosure laws differ quite a bit from state to state. I sell in both North and South Carolina since Charlotte is on the border, but the legal forms are very different and disclosure requirements are also very different. 

Dec 15, 2022 07:22 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Bill and great information to share with us here in the Rain.  Make it a great day!

Dec 15, 2022 08:06 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Bill - disclosure laws can certainly inform and confuse.  Kinda like evidence of a hornet's nest --- oh, the things that can happen during a typical real estate transaction.  

Dec 15, 2022 08:26 AM
Caroline Gerardo
Licensed in 20 states - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

Helpful and very detailed, thank you.

Dec 15, 2022 11:33 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Thanks for all the comments on real estate disclosure, guys.

Dec 15, 2022 11:59 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Thanks for sharing information regarding what your state requires to be disclosed.  I hope you have a great day.

Dec 22, 2022 04:19 AM