Notice that I said, “accurately.” We’re not talking about how a few misguided sellers, filling out the standard form that is required in residential home sales transaction in most states in the U.S., may think, “This place will sell better if I pretend it’s perfect.” I don’t think anyone is keeping statistics on how often that happens.
According to a recent column by real estate agents Tarpoff and Talbert (who write for various California local papers), what happens in a normal transaction is that, “There are always ‘yes’ answers” to questions on the disclosure forms about whether the home has various issues or defects.
That’s not a surprise to anyone familiar with the real estate world. A home starts deteriorating the minute someone sets foot in it, or even without the presence of humans. A seller would have to be utterly oblivious to overlook the cracked window, the door that doesn’t close, the in-law unit that the previous seller didn’t pull a permit for, and so on. Any seller with any sense of responsibility, or who is working with a real estate agent who explains that transactions go better (and are less likely to lead to later lawsuits) if sellers are forthcoming with the truth, will come up with numerous items worthy of disclosure.
But to anyone new to the process of buying or selling a home, it’s worth reflecting on the importance of (if you’re a seller) filling out the disclosure form accurately and completely and (if you’re a buyer) reading the form carefully, asking follow-up questions, and not panicking when you see some of those inevitable “yes” answers.
The disclosure form is, after all, an outgrowth of a shift in various states’ laws away from the old doctrine of “caveat emptor,” or buyer beware. That doctrine put the onus on buyers to investigate the home’s condition, and not to come crying back to the seller if it turned out that the basement floods every winter. (Just as it had for the last 35 years.)
That doctrine may have offered seeming simplicity, but what a mess for buyers trying to accurately gauge the value of the home they were buying. Not to mention the fact that neither buyers and sellers could be sure they wouldn’t meet again in a courtroom, with buyers alleging that sellers had gone beyond the confines of the doctrine and committed outright fraud.
Today’s laws and forms requiring seller disclosures make for a far better chance that the home-sale transaction will wrap up with everyone feeling well-informed and relatively unworried about later disputes. And now’s a good time to mention that Nolo’s website has extensive online information about the seller disclosure laws in various U.S. states.