Homebuyer’s Protection: All About Seller’s Disclosures
When it comes to buying a home, it’s all about full disclosure. The seller needs to tell you certain things about the house and, for the most part, sellers are honest. But, there’s always the chance that the seller will try to slip one by you and hope you won’t notice. So, an easy way to protect yourself is to take a deep breath, sit down, relax, and actually read through the seller’s disclosures with a careful eye.
What is the Seller’s Disclosure?
The seller’s disclosure is a certain list of information that the seller is required to give to you. It’s your protection from unscrupulous people trying to sell you a money pit. But, if you don’t look in the disclosure, you might willingly buy something that you otherwise wouldn’t buy. Every local government is different in what is required, but there are a number of common disclosures that are contained in most documents:
Structural, Electrical, or Plumbing Issues
If you’re unsure about the structural integrity of the house, check the disclosures and hire a home inspector. It might be helpful to have a lawyer and an agent from some place like Agent Harvest present for this – especially if this is your first home. Structural problems can cost tens of thousands of dollars to fix. In some cases, the cost can be so high, that it would be cheaper to just move – not good.
Electrical problems are another area that you want to investigate. Many older homes have electrical wires that are in desperate need of repair, and the disclosure will tell you whether there is a known problem with the electrical system. If nothing is listed, it doesn’t mean that the electrical wiring is perfect. It just means that there are no known problems.
Plumbing problems are pretty easy to discover as there will be a leak somewhere. But, this information is also disclosed on the documents.
Toxins in the Local Soil or Water
Living in a home where the water supply is contaminated can be a nightmare. It’s expensive to buy filtered water, and you have to be vigilant about changing the filters because your family’s life could depend on it. Check the disclosure for any known water problems before you buy. You also want to know about any problems with the soil, too, as it could make it difficult or impossible to plant that garden or flowerbed you’ve always dreamed about.
In some areas, you have what are called “water rights”. Usually, if a stream or underground water source runs through your property, you will have the rights to it, but you should be aware of any contractual issues which may negate or preempt those rights.
Flood or Wildfire Dangers
If you live in a flood zone, you’ll want to know about it. The disclosures will tell you everything you need to know. For example, if you live in some parts of Louisiana, you’re at a higher risk for flooding than, say, the mid-west. But, in the mid-west (i.e. Colorado), your risk of a wildfire is high.
Pests or Wood-destroying Insects
Termites, carpenter ants, and carpenter bees are all very destructive insects that you’ll want to know about before you move in. If there’s a problem, they’ll be listed on the disclosures.
Hazards like Lead Paint, Radon, Asbestos, etc.
While most homes don’t have lead paint in them anymore, some do – especially homes that haven’t been painted since the 1970s. Even then, if you do any remodeling, you might encounter issues with lead paint that’s been painted over. You may also have to deal with asbestos, which is really expensive to remove. Radon, a radioactive gas found naturally underground, can also cause a lot of problems and be expensive to ventilate.