It’s common practice in the real estate business to make a home look its best before putting it on the market. Most times, the “dressing up” is done to showcase the property at its absolute best, but some sellers do it to conceal certain factors. In most areas, agents and sellers must document known defects to potential buyers, but some try to hide things. Whether a client is in the market as a buyer or seller, they should know a few things about real estate disclosure.
Disclosure: What Is It?
A disclosure statement can come in multiple forms, and it provides the buyer with a chance to learn as much as possible about the property and the seller’s experiences with it. Potential disclosures range from the knowledge of a leaky roof, work completed without a permit, and information on nearby development projects. These documents not only inform buyers, but they also protect sellers from future litigation.
How Do Sellers Make Disclosures?
Laws related to disclosures vary by area, even on the local level. Real estate laws in Chicago typically require sellers and agents to sign or complete many documents, such as local and state transfer disclosures, natural hazard disclosures, and market condition advisories. Additionally, sellers must offer documented communications between previous owners, neighbors, sellers, and agents concerning substantial defects and items that can affect the home’s value.
What Should a Seller Disclose?
Previous upgrades and renovations are typically disclosed as well as the work’s permitting status. Buyers should verify the seller’s disclosures with city zoning reports and building permits. Work done without a permit may not have been done to code, which can cause health hazards and fire risks. Other common disclosures include termite problems, neighborhood nuisances, property line disagreements, and appliance defects. A disclosure document will ask the seller if they are in bankruptcy or if there is a lien on the property.
Buyers should consult a firm like Starr Bejgiert Zink & Rowells that handles real estate laws in Chicago before they sign off on a report or disclosure. Full, upfront disclosure is the best way to handle a real estate transaction, and it can help both seller and buyer. By being honest, sellers can offer buyers comfort and make their properties stand out from the competition.
