Need Help? (800) 634-8616 | | Schedule a Call
Have an account?

How much do you have to disclose about your home?

Overview of Renovation Loans

So…you are getting ready to put your home on the market and have heard something about “full disclosure.” The website,, tells us that, “In real estate transactions, full disclosure typically refers to the requirement that sellers disclose any defects involved with the property.”

Does that mean you should mention that time when the upstairs bathtub overflowed and the ceiling had to be replaced, and you’re not 100 percent sure it was done to code? Or what about that time when the septic tank caved in and the plumbing subcontractor (your brother-in-law) convinced you to just fill it in and dig another one?

The issue of full disclosure can be tricky ethically for sellers who just want to get the best price possible and move on. However, honesty truly is the best policy. It’s just the smart way to go anyway because the majority of buyers will have a thorough home inspection done well before the closing date.

In the rare case an inspection is not done, each state has specific regulations governing property sales and your legal obligations as a seller will be subject to penalty if they are not fulfilled. Keep in mind that there are also similar regulations at the federal level.

As we at eLEND are not legal professionals, it’s always best to check with your real estate agent and an experienced real estate lawyer for details on the specifics.

At the federal level, the one area that is firmly on the radar is lead paint. Any homes built before 1978 could carry this risk. If that date applies, disclosure forms that specifically address this problem should be completed after a lead paint inspection. Along with lead paint, other big issues are mold, termites, and issues with the roof, wiring, and plumbing. Those areas fall under each state’s jurisdiction.

Each state has its own requirements about disclosure and your real estate agent should be well informed in regard to how things are handled. Make sure your agent is current on their training because state guidelines change frequently. Many states offer sellers disclosure forms to list everything they know about their properties. Others allow hopeful sellers to simply sign a disclaimer stating they do not have any information regarding problems with the property.

Even though it may feel like common knowledge, if you live in an area prone to flooding, earthquakes, mud slides, tornadoes, or other natural events, by all means, mention it. Other forms of disclosure relate to zoning ordinances, proposed zoning changes and restrictions that may pertain to location, such as historic districts or waterfront properties.

Along with packing and cleaning, preparing a home to sell also means getting all of the skeletons out of the closet. If the home has been the scene of a violent crime or if someone died on the property, do not be tempted to sweep this information under the rug. If you do, you could wind up in court with a claim by the buyer that your failure to disclose damaged the home’s resale value.

When the seller is upfront, it’s likely to enhance the success of the sales process. In fact, what may have been a huge problem for the seller may not pose such a hurdle for the prospective buyer. In turn, they will be happy to have all the facts, such as a binder with receipts for repairs and insurance claim forms. Chances are, when honesty prevails, everyone wins.

Related Topcs:

Subscribe To Our Newsletter

Sign up with your email address to receive news and updates.