What Are Seller Disclosure Statements?
Most states have at least some kind of law requiring the seller to disclose information about issues, past or present, with the property when they are selling it. The level of detail required, as with all aspects of real estate law, varies by state and can even have local elements layered on top of the state regulations. As with every topic we write about, your best bet is to find out exactly what the laws are in the location where you are looking to buy. Your realtor should be able to explain the local regulations to you, but checking them yourself and/or speaking with a real estate attorney for clarification on anything you don’t understand can also be a good idea.
First and foremost, make sure you always receive whatever the required disclosure document is for any property you’re considering buying. In some states you get the disclosure before an offer is made, in others you get it after an offer is accepted. Whenever you get it, read the entire document. Make sure you understand what is being disclosed (sometimes the language can be a little confusing).
Make sure you understand what happens if there is something you see in the document that is a deal breaker for you. If you get the disclosure before you make an offer, you could just choose to not make an offer on the house. If you get it after your offer would be accepted, make sure your realtor explains to you exactly what circumstances your Agreement of Sale offer has in it to let you kill the deal if you find something on the disclosure that makes you want to walk away. In the case where you don’t see a disclosure until after your offer is accepted, I would ask the realtor what will be covered on the disclosure, and even ask to see a blank form for yourself.
Bottom line – ask questions.
Sometimes Sellers Lie
Sometimes the lies are tiny and not of any really big consequence. They are more of a seller honestly just forgetting to include something on the form. If you live at a property long enough, I could see how that might be plausible if you don’t keep good records. But, the disclosure is a legal document, so the sellers (and their realtor) should really take completing the document accurately very seriously. There is no way to know for sure if they did though.
There are things that you can double check and/or you can ask for documentation on. For example, in PA one of the questions is for the seller to state the age of the HVAC (heating and air conditioning) system. In our case, they lied about the age of the system here. How did we figure that out? There was a service record sheet stuck right to the unit itself that contradicted what they had put in the disclosure. The company who did the work was listed right on the service record. A quick call to them as the home’s new owner got me all the information I needed about previous service to the unit. You may or may not be able to get full records before you own the home, but certainly you could look for these types of service records. Your inspector should also be able to note the model and serial number of the unit and the date of manufacturing can be determined with those numbers. It won’t tell you exactly when it was installed, but it can show you if there is a major discrepancy in what they say and when the unit was made.
Here is a good summary about Seller Disclosures from Zillow.
Here are some questions to ask about seller disclosure documents to use with your realtor.