You've lived in your home for years and you've grown comfortable, but now it is time to move on. What happens if the next owner won't feel as relaxed with all of the little idiosyncrasies you don't even notice? How much should you tell a potential buyer? While several states have specific rules regarding necessary disclosure, one thing is constant: You need to be honest about any known issues.
Some states require written disclosures about any issue that may affect price, functionality and safety. Ask your Realtor, the one you are using to sell the house, for necessary disclosure forms and fill them out completely and honestly with "yes," "no" or "don't know." Even if your state does not require notice in writing, ask the Realtor for a list of mandatory disclosures. Although there are a few states where most issues are not required disclosure, a buyer who later learns of a serious defect can institute a lawsuit against you if you knowingly withheld the information. A good rule of thumb is to look at the house as if you were the buyer. What issues would you want to know about?
Some of the issues that should always be disclosed include: plumbing issues, termites or other infestations, air conditioning or heating problems, foundation cracks, poor property drainage, sewage concerns, leaky roofs, problems with the title and liens, and any repeated leaks in walls, basements, etc. Be sure to let prospects know about recent repairs as well. You should also disclose known issues in the neighborhood such as any registered sex offenders living in the immediate area, a nearby landfill, noxious odors or other possible detriments. Let buyers know about the existence of underground tanks or abandoned wells on the property.
Federal law does mandate telling prospective buyers about any lead (paint, pipes, etc.) in the house, as well as other known toxins such as radon, mercury, asbestos, carbon monoxide and formaldehyde; in the possible presence of known toxins a buyer needs to be allowed a reasonable time to have the house professionally tested before making an offer.
Although most buyers do hire their own home inspectors, many Realtors also recommend that sellers have their homes inspected independently before listing to make them aware of any potential issues; one caveat to the preliminary home inspection, the buyer must disclose all known major physical defects, and if an inspection turns up something you originally did not know about, you cannot claim plausible deniability. If you knowingly withhold your knowledge of mandatory disclosures or misrepresent the truth if asked a direct question, in addition to possible lawsuits, you may also be charged with fraud if the buyer later discovers the defect.
Disclosures regarding the "history" of a house do vary from state to state; issues such as deaths, murders, crimes, some terminal illness resulting in death, and paranormal activity can make the home a "stigmatized property." In California, among other disclosures, you must tell a prospective buyer if a death occurred in the house only within the previous three years. In Massachusetts, there is no required disclosure about history that might psychologically impact a sale. Pennsylvania does not require any disclosure about stigmatized properties saying that it does not affect the material structure. Potential buyers in Ohio do not need to be told about murders, crimes and hauntings during the first showing, but should be told if they come back to make an offer. In almost every state, though, sellers are required to answer honestly to the best of their knowledge if a direct question is posed.
Local licensed real estate brokers will be able to guide you on what is necessary for you to disclose when selling a residential property. In some states the onus is on the real estate broker to disclose information supplied by the seller, but that does not absolve the seller from being truthful about issues that may impact the material value of the home. Written disclosures with buyer signatures upon receipt will also help to protect sellers from possible lawsuits down the road. Since legislatures constantly evaluate buyer complaints the expectation of full disclosure may change periodically, always get the most up-to-date requirements when selling your home.