How to Provide Full Disclosure When Selling a House

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Full disclosure of a home's defects and condition helps buyers and sellers in a real estate transaction. Buyers have reliable information on which to base their decisions about a house and sellers protect themselves from future liability. In general, sellers should disclose all of a home's problems that they know about, but they don't have to inspect for defects they aren't already aware of. Issues you personally know about that may affect the home's value or desirability are especially necessary to disclose, as you could end up in court for withholding such facts from buyers.

Speak Up if Something's Wrong

Let potential buyers know about problems as early as possible. Real estate brokers can list defects on the Multiple Listing Service, giving buyers and agents a heads up and insight into the home's value and condition before they make offers. For example, a cracked foundation or un-permitted improvements to a home are often noted in the MLS, as they can affect buyer financing. You can also make defects known via formal disclosures and reports. The latter is a federal and state requirement for certain problems. When using real estate brokers, some brokers may ask you to fill out more forms than others to reduce their liability as well.

Know Your Disclosure Responsibilities

Some states require sellers to disclose more than other states. States also may list defects you must actively search for and identify, even when there's no obvious sign of damage. If you find such defects you can't pretend you didn't see them. Or if you didn't find a defect because you simply didn't look for it despite state mandates, you may have to compensate the buyer. Real estate brokers, real estate attorneys, your state's real estate department, and your city's planning department can help you understand your disclosure responsibilities when selling a house.

When in Doubt, Disclose

Avoid potential liability for failing to disclose by making buyers aware of defects, even when you question whether disclosure is necessary. The benefits are twofold: Full disclosure inspires buyer trust and your buyer is less likely to walk away after uncovering the defect and they're less likely to sue you for damages after closing. Disclosing property issues doesn't automatically obligate you to make repairs either. Should the buyer consider the flaw serious, but still want the home, it may be a matter of negotiating a price reduction or repair credit. In the best case scenario, the buyer overlooks the issue.

Use the Right Forms

There are a variety of forms for seller disclosures. Federal law requires sellers in all states to disclose the possible presence of lead-based paint in houses built before 1978. The law gives buyers 10 days to test for lead and requires you to state whether you know of lead-based paint or hazards in the house. You and the buyer must sign a boilerplate disclosure form and you must supply the buyer with an informational pamphlet on protecting against lead poisoning. Most states specify minimum seller disclosures and local real estate associations and jurisdictions may have additional requirements. Points of disclosure can include toxic mold, recent deaths on the property, and termite damage. You can usually access the disclosure forms on the state or city website or real estate brokers supply them.