Disclosure Statements

Because of a recent increase in court related actions, today's sellers are increasingly offering buyers a disclosure statement that puts down everything in writing.  In fact, disclosure statements are quickly becoming a legal requirement for real estate transactions in many states.

All the experts consider a disclosure statement a wonderful document that covers the rights of both the seller and the buyer.  For those buying, this document represents a dream come true as everything that is wrong with the property is disclosed in a legal and binding way.  As an added advantage to the buyer, the seller is additionally responsible for anything discovered that the seller should have known about.

The disclosure statement is an advantage for the seller as well if the opportunity is handled properly.  By disclosing all the defects on the property in an open manner, the seller has put the buyer on notice as to these defects.  For this reason, the buyer has less reason to come back and complain. For both the parties involved, the disclosure statement reduces the possibility of problems later on. In effect, the disclosure statement affirms that the buyer is getting a fair and equitable deal from the seller.

There are several things a buyer needs to know about the disclosure statement.  First of all, the buyer needs to be aware that the seller, to avoid later complications, has included all the defects in a statement.  Some of these may not be very serious, and the buyer should not be immediately concerned by the size of the list.  It is important to remember that the seller usually feels that it is necessary to include all the defects.

The buyer must also be aware that there is room for error on the statements.  This means that a thorough investigation of the property is necessary regardless of what the statement says. The third item that needs to be looked at regarding disclosure statements is perhaps the most important.  Sometimes, these statements are worded to suggest there is only a small problem when really a larger one exists. Learning to read the language of these disclosure agreements is crucial.

As well, the statement itself will vary from area to area.  There are still parts of the United States where no disclosure statements exist.  It is essential for all buyers to have a lawyer look over the document.  Of course you should make arrangements to have a disclosure statement before you buy a property.  You should also take time to read the document over before the home inspection, and bring the document with you during the inspection so you can refer to any problem areas.

California has the most stringent disclosure laws in the United States at this time.  They are so strict in fact, that a buyer has three days in which they can rescind the contract with the seller without penalty because of something that was disclosed in the disclosure statement.