“Let the Buyer Beware” has no place in modern real estate sales transactions. The days are long gone when a buyer purchased a home with no idea about the problems a home might have.  Both the Courts and State Legislatures have recognized that it is the home owner who has the best knowledge about the problems a home might have, and therefore, laws were passed which require sellers to disclose known problems so the buyer can make an informed decision about whether or not to proceed with the purchase.

Disclosure laws generally require the seller to provide the disclosure at the time the contract is entered into, and if one is not provided, the buyer has the right to cancel the contract and have his earnest money deposit returned. Disclosure of all known facts is of paramount importance, even if it affects the ability of a seller to sell the home or obtain the asking price. Remember, a seller is more likely to obtain his asking price if he fixes the problems a home might have. Conversely, a buyer will reduce the amount of an offer if he or she is going to have to spend money to correct the problems.

What are some of the items that a seller should disclose in a real estate transaction? No list can ever be complete as each home is different, but the most important thing to do is to disclose defects that are known. Known defects might include, but are not limited to, problems with plumbing, heating, sewer, and structural problems. In other jurisdictions, disclosures have to be made regarding natural hazards, presence of lead based paint, earthquake safety, environmental hazards, and zoning issues.

Typically, it's better to disclose something, even (especially!) if you think it will be deter a potential buyer.  It's better that the buyer make a decision about the facts before purchasing the home than come after you in court after they have bought the home and found the problem!  In Washington state, only material facts that affect the property need to be disclosed.

Realtors are knowledgeable about what disclosures are required in residential real estate sales transactions.  In many cases, if a real estate broker represents a seller, the law imposes the same disclosure requirements on the broker as well. Whether you are represented by a real estate broker or not, you must still comply with the disclosure requirements of the law.

The information presented here is for informational purposes only and should not be interpreted as tax, legal, or investment advice. Individual cases are all different, so this information should be used only in conjunction with the appropriate professional advice.