Whether it is your first home purchase or your fifth, real estate transactions can quickly feel overwhelming. Selling a home, however, contains an intimidating document called the “disclosure statement.”
The disclosure statement has essentially become a question and answer survey where property owners must go through five pages of yes or no questions that cover numerous topics such as infestation, building code violations, flood damage, electrical problems and other issues. It is the fair exchange of knowledge that the buyer will use to either negotiate a different asking price, negotiate repairs to be made before closing or start a list of things that need to be addressed after taking ownership.
Here are five disclosure mistakes that can derail a sales transaction:
- Turning a blind eye: If you have noticed a water stain on the ceiling after a heavy rain, it is wise to disclose it. After closing, the matter might go to court and it would be hard to prove the seller had no knowledge of the problem.
- Failing to update: In the situation above, the disclosure statement must be changed to include any new information that has been discovered.
- Not disclosing repairs: Even though a problem was fixed during your tenure as homeowner, it doesn’t mean that the new owner doesn’t deserve to have a clear picture of the history of the property.
- Ignorance of state requirements: If there is any sort of question about the disclosure statement, it is wise to discuss the matter with an experienced real estate attorney who can investigate the city, state or region’s requirements and educate you on them.
- Guessing: Never guess. A sales contract is a legally binding document. If you’re not sure of the answer ask your attorney, your realtor or both.
Do not hesitate to contact an attorney for guidance. A real estate transaction is likely the biggest financial matter you will ever face. It is crucial to avoid simple mistakes that might derail the entire process or lead to legal trouble in the future.