Dave Ramsey's Real Estate Minute June 12, 2012 Home Sellers: Avoid a Lawsuit After the Sale The Tip: State and federal regulations require homeowners to disclose any known defects their home has to potential buyers. What you don't know won't hurt you, right? For homebuyers, what you don't know could actually cost a lot of money. That's why states require home sellers to tell potential buyers about any problems their homes have. Disclosure Basics In general, a seller should reveal anything about their home they would want to know if they were in the buyer's shoes. To help them be as upfront as possible, states require sellers to provide a disclosure form listing their home's defects. "This is probably the most important document in the transaction," Indiana real estate agent Mary Edwards explained. The forms vary by state but cover specific aspects of the home including: Appliances Electrical systems Water and sewer systems Heating and cooling systems Roof Additional federal regulations require owners of homes built before 1978 to alert buyers of any known lead-based paint in the home. A home inspection will turn up these issues, so real estate agent John Riesterer advises sellers have an inspection before they list their home for sale. "If there are problems, you can have them fixed and show potential buyers paid receipts showing that the problems have been fixed," John said. "You stand a better chance of selling your home." Honesty Is the Best Policy Sellers must also disclose details about the property, including any zoning issues, whether or not the home is in a floodplain, or if it's subject to a homeowners association. In some states, sellers must tell potential buyers if someone has recently died in the home. Other owners must reveal if a registered sex offender lives nearby or if the seller is a registered sex offender. "Disclose, disclose, disclose to the best of your ability," Mary said. "Buyers are never happy when there is a 'big surprise.'" Owners who knowingly hide problems can be held responsible for the costs of repairs and other damages. We'll take a closer look at what can happen in next month's Real Estate Minute newsletter. Protect Yourself With Professional Advice The best way to avoid disclosure issues is to work with a professional. Mary and John are real estate Endorsed Local Providers. That means Dave trusts them to give you the same excellent advice and service he would give you himself. Whether you're buying or selling a home, your ELP will make sure all the legal requirements are met—saving you time and money. Contact your ELP today! Share this: