SELLERS: WHAT ARE DISCLOSURES? HOW DO YOU PREPARE FOR THEM?
After signing the listing agreement with your agent, filling out your home’s disclosures is one of the next steps in the home-selling process.
So what are disclosures, and how open should you be about them?
What Are They?
Disclosure laws are meant to protect both sides. Disclosing any issues about major home components, systems, and conditions puts your buyer on notice and prevents you, the seller, from being held liable for future problems.
Providing disclosures doesn’t mean you’re giving a buyer guarantees about your home. You must, however, give truthful information about defects you know about or should have known about, but were perhaps ignoring. In most states, it’s illegal for a home seller to knowingly conceal major defects from buyers (click here for disclosure obligations in California).
After your home is under contract and before the sale is finalized, the buyer will typically hire a property inspector. The better prepared you are for the results of this inspection, the better the outcome.
How To Prepare
To put yourself in the best position before disclosures and the ensuing buyer inspection, you should have at least a basic understanding of the most probable defects that a home inspector is likely to find.
According to the National Association of Certified Home Inspectors, these defects include:
- foundation drainage trouble
- electrical defects
- roof problems (drainage, leaks, or rot)
- heating combustion problems
- improperly done repairs
- structural damage
- plumbing problems
- infiltration by water or air
- inadequate ventilation of attic or crawlspace
- construction flaws.
Knowing what issues to look for and how to quickly and effectively resolve them is half the battle. To ensure a smooth inspection, take these steps before the inspector arrives:
- If your home is vacant, make sure the power is on.
- Make sure all light bulbs are working.
- Pare down the clothes in your closets so the inspector can see inside them.
- Remove items away from basement walls so they can be inspected for cracks and water penetration.
- If there is access to the attic in a closet, make sure it’s accessible.
- Change the filters to your furnace and leave any service tags so the inspector can see them.
- Do not try to conceal any defects you know are present in the home. Trying to cover up problems will throw up a major red flag.
- Ask your real estate agent to be present during the inspection.
The Benefits Of A Pre-Inspection
The buyer’s inspection will most likely uncover defects, and you will be expected to repair them if you want to get full asking price for your home. However, you will only have until closing to get the repairs done. This is why we always recommend our clients to conduct an inspection before listing to get ahead of any issues. Typically, an inspection costs between $200 and $500, but the advantages far outweigh the cost:
- You’ll find out what condition your home is in.
- Pricing the home accurately is much easier. Even the best real estate agent will struggle with effective pricing if the state of your home is unclear.
- Minimized stress. You’ll be putting your home on the market with confidence you’ve corrected any large problems.
- You’ll be in full control of the scope, timing, and price of the repairs.
- Less likelihood of extreme negotiations.
- You’ll improve the buyer’s confidence.
The buyer, of course, will still conduct their own inspection. But if you have a pre-inspection, you can proactively resolve major issues which would otherwise make a sale fall apart. As your real estate agent, we want you to make sure you are as prepared as possible.
Can We Help?
Trust Julie and her team to guide you through the disclosures and inspection stages. Their goal is to eliminate stress while helping you achieve the results you want.
For more information on how we can help with your selling needs, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.