What is full disclosure and why is it important? When dealing with one of the most expensive purchases of a persons’ life it is pretty important to make sure the deal is as honest as you can make it. This honesty refers to the buyers, sellers, realtors and inspectors. I am sure you have heard of the expression “buyer beware”. This means if you are buying you should do all you can to reduce the risk of buying a money pit. When you involve a home inspector and a realtor you should be reducing that risk as these professionals should help you to avoid most of the pit falls inherent in this type of purchase.
If you are the seller you need to disclose to the buyer all you know about the home in terms of the major issues you might be aware of. I can tell you from experience that you should not leave this part of the process to anyone else. You need to be clear about the conditions of the home. Don’t leave any part of the disclosure to misinterpretation by the seller. As an inspector I try to be as thorough as I can to present the fact of what I see in the clearest light possible. Sometimes this means I need to use my vast experience to predict a likely problem even though I can’t physically see it. In my opinion it is best to deal with the issues up front during the negotiating process rather than in court a year later. As I always say, “it is what it is”. I realize that full disclosure may cause a buyer to back away from the deal but this is far better than the fight later on if you choose to be dishonest.
In the real estate world there are forms the seller fills out called PCDS or property disclosure statements. When you are filling these out you should list anything you feel is significant in terms of the major components of the home. I have experienced several misunderstandings about the PCDS. If you are in doubt about what you need to fill out here ask your realtor. Form my experience most people are honest but sometimes they fill the form out quickly and forget to disclose things or don’t disclose things because they consider them unimportant. My advice is to take a day or so to fill out this form, then ask your realtor to help you decide if there are any questionable issues you are not sure should be included in this disclosure statement.
Let’s face it, you don’t want to tear your home apart in the disclosure statement but there are likely some things you should inform the buyers of. Here are a few guidelines I’d suggest adding to the PCDS. If the home has ever flooded or if it has had major damage due to a water line or fixture leak. Many times the sellers realize the problem, fix it and consider it no longer important so they don’t think to mention it in the PCDS. All of a sudden the inspector or the new owner finds evidence of the past leak and they go into panic mode. The whole deal is thrown into dispute and the seller is made to look like they are dishonest. It is best to disclose past issues even if you feel they are not that important.
Even if you are not concerned about a current problem and consider it normal wear and tear for the age of the home, you should still disclose it. I’m not talking about a tear in the carpet or a poor paint job. I am referring to things like a chronic furnace problem or recurring ice damming. These are things the buyer will want to know and once disclosed they can make an informed decision. Once again if you are in doubt about whether you should put an issue in the PCDS you should seek the advice of a professional such as your realtor. Most of us only buy and sell a few houses in our lifetime so we are very inexperienced in the process. Realtors on the other hand have vast knowledge of this area and you are paying them to properly guide you through the process where everyone is treated fairly. Let’s face it most homes have issues and need some repair and maintenance, in fact most sellers want to upgrade because the want a better home, having said that the sellers are not going to bring an older home up to today’s standards to sell it. If they did that they might as well not move.