Home Sellers - Reduce Your Risk with the Seller's Disclosure Notice
By: Betsy McKernan REALTOR®
Montgomery Area Chamber of Commerce Member
With the explosive growth in the Montgomery area comes new residents looking to buy homes. If you are thinking about selling your home, you should know that there are many documents that are required or should be given to a home buyer. Preparing and providing the proper documents is a way to reduce a home seller’s risk. The Seller’s Disclosure Notice is one such document. In Texas, providing a Seller’s Disclosure Notice (Notice) to a buyer is a legal requirement found in the Texas Property Code, Section 5.008. There are some exceptions to the requirement, but I won’t address those in this article. The statute outlines the minimum required disclosures. The Notice will disclose to a buyer which items are present in the home and whether any of the items are in disrepair. The condition of mechanical systems and structural components are also addressed in the Notice. The Texas Real Estate Commission and the Texas Association of Realtors (TAR) have developed a Seller’s Disclosure Notice. The TAR form goes beyond the minimum disclosures required by the statute but is generally the one that a seller will be presented with from his or her real estate agent. While the TAR form is not mandatory, it is comprehensive so it will serve a seller well to use it. INSERT IMAGE HERE Buying a home is one of the biggest purchases a person makes. When making such a decision, a buyer wants to be fully informed of any issues that might make them think twice, issues that are material, to a buying decision. The Notice lets buyers know what the seller knows about the condition of the property. A thoroughly completed Notice will go a long way to reducing a seller’s risk of being sued. Lawsuits in real estate transactions in this area generally arise when a seller misrepresents a material fact about the property or fails to disclose or conceals a material fact about the property. Sellers should view the disclosures as a risk reduction tool and follow a practice to disclose, disclose, disclose.
To that end, sellers should consider the following when completing the Seller’s Disclosure Notice:
- Disclose what is known and be as complete as possible. If something is asked but unknown, so indicate.
- If you disclose something that requires an explanation, make a thorough explanation.
- Disclose any known hidden defects that the buyer would not discover through his or her normal diligence.
- If the Notice asks you to provide an additional form or document relative to a question, attach the requested form or document.
- If there is no question or line on the Notice relating to an issue that you believe a buyer would want to know about when making an evaluation of the home, add the information to the Notice.
- If you have supporting documentation about any defects or repairs made, attach it to the Notice.
- Fill out the Notice prior to listing your home in order to deliver the Notice to the buyer on or before the effective date of the contract to avoid a potential buyer termination.
- Consider if there are any material issues not already addressed in the Notice that require further explanation and explain them.
- If, after having completed the Notice, you discover additional facts about your home that should be disclosed, update the Notice.
About the Author: Betsy McKernan - Betsy is a full-time associate real estate broker with Walzel Properties. She assists her home buyer and seller clients in navigating and understanding the transaction and the process. She is also a licensed Texas Attorney and practiced law for over 20 years before entering real estate in 2013.
