Disclosure Time: What Every Agent Should Know About Property Disclosures

Let’s be honest—property disclosures may not be the most exciting part of real estate, but they’re crucial. This isn’t a game of “don’t ask, don’t tell.” It’s more like “ask, tell, disclose, and avoid legal nightmares later.” Property disclosures are the seller’s way of saying, "Here’s everything you should know about this house—warts and all."

It’s your job as the agent to make sure that your seller fills these out completely, truthfully, and on time. Because if something’s wrong and it’s not disclosed? You bet that’s coming back to bite someone (and it could be you).

What Are Property Disclosures?

Property disclosures are essentially the seller’s legally required confession about any known issues with the property. These could be things like:

• Structural Problems: Is the foundation sinking? Got a crack running through the living room floor? That’s gotta be disclosed.

• Water Damage: Was the basement flooded at one point? Even if it’s been fixed, it still needs to be reported.

• Electrical or Plumbing Issues: Outdated wiring or leaky pipes? Those go on the list, too.

• Mold and Pest Infestations: Yep, even that termite problem from five years ago needs to make an appearance.

• Environmental Hazards: Radon, asbestos, lead-based paint? These aren’t just hazards, they’re legally required disclosures.

In short, if it’s an issue that could affect the property’s value or safety, it needs to be disclosed.

Why Are They Important?

You know that feeling when you buy something online and it’s not what you expected? Imagine that, but it’s a house with a faulty roof or a major mold issue. Buyers have the right to know what they’re getting into. Disclosures protect them from making uninformed decisions—and they protect sellers (and you, the agent) from lawsuits down the road.

Here’s why you should care:

1. Legal Protection: If a buyer discovers something major after the sale that wasn’t disclosed, they could sue the seller for damages. And if you didn’t make sure that disclosure form was filled out properly? You might find yourself in the hot seat, too.

2. Building Trust: Full transparency builds trust with buyers. No one wants to feel like they’ve been tricked into buying a lemon.

3. Avoiding Delays: If the buyer’s home inspection uncovers something major that wasn’t disclosed, it can delay the deal or even kill it. And nobody wants a deal to die when they’re this close to closing.

The Nitty-Gritty of What Gets Disclosed

Each state has its own disclosure laws, but here’s a rundown of what typically needs to be included:

• Lead-Based Paint: Federal law requires disclosure of lead-based paint in homes built before 1978. Sellers need to provide a lead disclosure form and an EPA pamphlet titled Protect Your Family from Lead in Your Home.

• Natural Hazards: If the property is in a flood zone, wildfire area, or earthquake-prone region, that needs to be disclosed.

• Repairs and Renovations: If a major system (like HVAC, roof, or plumbing) has been repaired or replaced, the buyer needs to know.

• Neighborhood Nuisances: Loud neighbors, constant traffic, or nearby construction? That’s a need-to-know situation for potential buyers.

• Deaths on the Property: In some states, sellers must disclose if a death occurred on the property—especially if it was a murder or suicide.

What Happens If You Don’t Disclose?

The consequences of not disclosing property issues can be brutal:

• Lawsuits: If a buyer discovers something that should’ve been disclosed, they can sue for damages, repair costs, or even demand that the sale be undone.

• Fines: Some states levy hefty fines for failing to disclose required information, especially when it comes to environmental hazards.

• Reputation Damage: If word gets out that you’re the agent who didn’t handle disclosures right, it could damage your reputation—and in real estate, reputation is everything.

So, When Do You Provide the Disclosures?

In most cases, disclosures are handed over as soon as the seller accepts an offer, but here’s the smart play: get them filled out before you even list the property. This way, there are no surprises that could derail the deal later on.

How to Make Sure You’re Doing It Right

• Use the Right Forms: Every state has different rules and forms for property disclosures. Make sure you’re using the correct one for your area.

• Be Thorough: Encourage your sellers to be brutally honest. Even if they think an issue is “no big deal,” it’s better to disclose it than risk a lawsuit later.

• Document Everything: Keep a record of everything the seller discloses, and make sure it’s all in writing. Verbal agreements don’t count for squat in real estate.

Disclosures might not be sexy, but they’re necessary. The more upfront and transparent you (and your sellers) are, the smoother the transaction will be. No hidden surprises mean fewer headaches, no lawsuits, and more deals that actually close. It’s a win-win.

So next time you’re gearing up to list a property, get that disclosure form in front of your seller right away—because keeping it real from the start is the key to a smooth transaction.

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