Seller’s Disclosure

What is the Seller’s Disclosure?

The seller’s disclosure statement, commonly known as a seller’s disclosure, is a legal document that outlines a home’s history and lists any issues that the seller is aware of. The seller’s disclosure is provided by the seller to the buyer before closing in order to help the buyer make an informed decision on whether or not to purchase a home.

The seller typically provides the disclosure to the buyer a few days before signing the Purchase and Sale Agreement (PSA); the buyer and seller sign the Disclosure when they sign the PSA. Buyers may also ask to receive the Disclosure before making an offer.

The details required in the Seller’s Disclosure are to be filled out by the seller to their best knowledge—and vary by local, state, and federal laws. Most states have a multi-page, standardized form that guides the seller on what they need to disclose.

Commonly required disclosures include: property repair history; damage, hazards, faulty systems (foundation issues, lead paint, natural hazards, infestations, etc.); property liens; HOA governance; and property line disputes. Some states may also require: previous deaths in the home; which home items are or are not included; and nearby nuisances.

Why does the Seller’s Disclosure matter?

For the buyer, the Seller’s Disclosure offers protection from unknowingly purchasing a property that may have hazards or needs costly repairs. The Disclosure also give the buyers the right to cancel the deal without financial repercussions or sue the seller if they can prove the seller knowingly failed to disclose or misrepresented required details.

For the seller, the Seller’s Disclosure is important because it can protect the seller from being sued by the buyer after purchase. If the seller complies with the applicable disclosure requirements to the best of their knowledge, they will not be liable for issues discovered during or after the completion of the closing process.

What does a buyer do with a Seller’s Disclosure?

The buyer must carefully review the Seller’s Disclosure before signing them or the PSA, and should:

  • Be familiar with the Seller’s Disclosure laws applicable to the property (city, state, and federal; Caveat emptor, Full Disclosure, Disclosure Disclaimer)
  • Cross-check the disclosed information with local and professional reports, permits, or records
  • Review the document with someone experienced or professional
  • Hire an inspector to conduct a separate assessment of the home’s condition to confirm the information in the Disclosure

For more information, check out our guide to creating a seller’s disclosure statement.