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When I am listing a property this is usually the most asked question and the one that has the most concern attached to it. The client sometimes feel they are signing their life away or painting themselves in a corner by filling it out. Some agents don’t ask their clients to fill it out as they think it is too stressful. Clients ask “What ever happened to Buyer Beware”. Well the truth of the matter is that the current regulations covering Property Disclosure Statements probably protect the seller as much as the buyer and is also the fair way to do business. A buyer shouldn’t have to worry about buying a new home blind to all the things that could be a problem. The Disclosure Statement simply asks questions that should be asked anyway during the transaction. My clients tend to get panicked when they don’t know the answer to one of the questions. I tell them to simply don’t guess, if you don’t know state that they Don’t know in the appropriate box. One of the questions is “Are you aware of any problems with the sanitary sewer system”. Now this is a straightforward question and again one that should be asked. If the seller has been having problems with their septic tank they can’t keep it a secret from a potential buyer. Remember everyone is a potential buyer and how would you feel if you were in this situation and a seller didn’t tell you of a problem and you found the back yard awash in sewage the day you moved in. Another apparent difficult question is ” Are you aware of an additions or alterations made without required permit and final inspection; ie building,electrical, gas?” Now as we all know many people do some work on their homes without getting permits or inspections as we all know the hassle this can be. So the question is “how do I answer this question when it is such a common practice?” The answer again is truthfully. If you did some renos without permits say so and be specific as to what they were. This is where the Property Disclosure Statement can work for the seller.. If you have answered truthfully that there were renovations done without permit or inspection it makes it very difficult for the buyer to come back to you later if there is a problem with one of the renovations. They in fact knew that this particular work had been done without permit so basically accepted that when they signed off on the Disclosure Statement.
Most Realtors will include the Property Disclosure Statement in the contract attaching it via an addendum. If the Statement is not specifically included then it does not become a part of the contract and is just a piece of paper. An attorney may argue that it can be used in a legal action but to be sure it should be included as part of the original Contract of Purchase and Sale.
Your Realtor will ask you to fill out the Property Disclosure Statement rather than them because you actually have to initial each questions answer to ensure that it is a true representation of your s knowledge of your home.
As a Realtor I find it is best to be honest with everyone right from the beginning. It prevents a lot of problems down the line.
Thanks you all for the comments and if you have any suggestions for subjects for my Blog just drop me a note at keith @iamlangley.com. Thanks again.