What do you have to disclose when listing a home?


Written by: Andrew Goodman

What do you have to disclose when listing a home?Question: I am getting ready to list a property that had water damage. I have since repaired everything. What do I have to disclose?

In Maryland, you must disclose pretty much everything!!!! As a Realtor, it is instilled in our brains to disclose, disclose, disclose.

From the Maryland Association of Realtors “Notice of Buyers Rights to Property Disclosure” addendum; A written property disclosure statement listing all defects including latent defects, or information which the seller has actual knowledge in relation to the following:

  • Water and sewer systems
  • Insulation
  • Structural systems, including the roof, walls, floors, foundation, and any basement
  • Plumbing, electrical, heating, and air conditioning systems
  • Infestation of wood-destroying insects
  • Land use matters
  • Hazardous or regulates materials, including asbestos, lead-based paint, radon, underground storage tanks, and licensed landfills
  • Any other material defects, including latent defects
  • Whether the smoke alarms:

–        Will provide an alarm in the event of a power outage

–        Are over 10 years old

–        If battery operated, are sealed, tamper resistant units incorporating a silence/hush button and use long-life batteries as required in all Maryland homes by 2018

  • If the property relies on the combustion of fossil fuel for heat, ventilation, hot water, or clothes dryer operation, whether a carbon monoxide alarm is installed on the property.

“Latent defects,” means material defects in real property or any improvement to real property that:

  • A buyer would not reasonably be expected to ascertain or observe by a careful visual inspection
  • Would pose a threat to the health or safety of the buyer or an occupant of the property

When selling a home with an issue such as the one questioned, I would disclose everything. Don’t leave out any details. However, make sure to have written documentation from the licensed contractors who repaired the damage showing the buyer all of the work that was done, in hopes to remove any fears that they may have. If the proper steps were taken to repair the damage and there is proof of those steps, then the potential buyer should not be nearly as worried if they were to find the past problem(s) on their own.

If they seller didn’t want to disclose everything, he/she can provide a written disclaimer statement providing that:

  • Except for latent defects of which the seller has actual knowledge, the seller makes no representations or warranties as to the condition of the real property or any improvements on the real property.
  • The buyer will be receiving the property “as is,” with all defects, including latent defects, that may exist

If a disclaimer is provided instead of a disclosure, the buyer could believe there is a higher risk with the property and could therefore offer less on the property. A disclosure statement tends to lead to higher offer prices and sometimes even a waived home inspection whereas a home inspection is almost a definite when a buyer is provided with a disclaimer statement.

If you know something is wrong with the property, repair it before listing the home and disclose it to the buyers. That is just the best way to handle something. If something is not disclosed, the buyer will eventually find out and it will lead to a larger issue later on.