Disclosure Law: Your Buyer Can Handle the Truth

If you're selling your home, it's important to fess up about its flaws. Here's why.
After of Exterior With Gray Siding, Dark Brown Door & Brick Walkway

A Fixed Up Home With Dark Dutch Front Door

Fixer Upper hosts Chip and Joanna Gaines have repainted the siding of the home a modern gray/green and kept the original Dutch door but painted it with a faux finish to look like a dark stained wood grain. They also updated the landscaping as well as a new walkway that matches the brick of the chimney.

From: Fixer Upper

By: Kris Berg

Related To:

When selling your home, you will be required to disclose any and all material defects which could affect the buyer’s enjoyment of the property. In short, if a condition exists or has existed in the past which could influence the decision to purchase, it must be disclosed. In the world of disclosure law, less is not more.

Each state has its own real estate disclosure laws. In California, we have many, and the Transfer Disclosure Statement, or TDS, is the “Big Kahuna” among statutory disclosure requirements. It is on this form that the seller has the opportunity to share historical information on the property -- what fixtures exist or don’t, what works or doesn’t, and what skeletons may be found in the walk-in closet. It is a three-page, check-box, fill-in-the-blanks kind of document with some bonus lines thrown in to allow elaboration. Few sellers ever elaborate, however, and this is a mistake.

We are often asked, “Do I have to disclose this or that?” And our reply is always, “If you have to ask, then yes, you do.” In my experience, no buyer has ever canceled contract because a seller was too thorough. And I can all but guarantee you that if you don’t disclose the time that the upstairs toilet decided to become a drip watering system for the downstairs living room, your buyer’s future neighbor will. In fact, a TDS for an 18-year-old home that suggests everything is and has worked perfectly since the builder delivered the first set of keys will be eyed with suspicion.

Sellers often approach the disclosure process with fear and trepidation. “If I tell them about that thing that happened, they might not want the house anymore!” That may or may not be the case, but better to know now and not one day before the moving truck is scheduled to arrive.

More importantly, being thorough and honest during the disclosure process tends to earn the trust of the buyer, and trust between the parties is arguably the most important component of the successful real estate transaction. I once had a selling client who, for lack of a better term, we shall call “detail oriented,” and this client was a stellar example of why you might want to go a little overboard in sharing your home’s idiosyncrasies and flaws.

This seller, possessing an awe-inspiring attention to detail, delivered a TDS to the buyers in which he had taken full advantage of every inch of white space. If this wasn’t enough, he included self-penned Addendums A, B, C, and D totaling, I believe, 10 pages (double-sided). If a light switch had been replaced during the Pleisotcene Era, he noted it. Busted faucets and dirty air filters of yore, leaning fence posts, and a closet door that hasn’t always stayed dutifully in the track? Guilty as charged. The buyer’s response, while predictable to me, served as a good refresher course on fair dealings. The buyer was appreciative -- dazzled in fact -- and as a consequence, was convinced that there would be no surprises after the mail had been forwarded.

In our case, the result was that the buyer asked for no repairs -- zip, nada, nothing. No home is perfect, but the buyer’s agent attributed this to the trust that had been won when the seller threw the book at him, so to speak.

Honesty wields great power. No one wants to believe they are being taken advantage of or being played the fool. People respect those who treat them fairly, and openly disclosing all you know about your home is one way in which you can demonstrate this respect for the other party in the transaction. Your buyer can handle the truth.

Next Up

What Foreclosure Means and How to Stop It From Happening

Learn about the various steps in the foreclosure process and ways you can avoid losing your home.

The Skinny on the Short Sale

How to get a short sale when you're facing foreclosure on a house.

Short Sale Rules: What You Need to Know

A short sale occurs when a property is sold for less than what is owed on the mortgage with the lender's approval. Learn the advantages and disadvantages of this type of transaction for the seller and the buyer.

Moving Day Tips: How to Pack for a Move

These 10 packing tips will help you move more efficiently and smoothly.

Did I Accept a Bad Offer on My Home?

Worried you accepted a bad offer for your home? Let real estate expert soothe your fears.

Sellers: What to Do When You Can't Find a Home Before Yours Sells

If you sold your house before you've found new digs, don't worry: You have options.

How to Quickly Sell Your Home When Threatened With Foreclosure

Get tips and advice on how to sell your home fast.

How to Deal With Your Lender When Facing Foreclosure

In the foreclosure world, "workout" has nothing to do with the elliptical trainer. It's about cutting a deal with your lender to stop the foreclosure process.

Advantages and Disadvantages of Buying a Home in Foreclosure

Purchasing a foreclosed home can mean getting a bargain, but there are potential pitfalls too.

For Sale By Owner (FSBO): How to Sell Your Home by Yourself

Are you considering selling your home without a real estate agent? Follow these tips to make the process as smooth as possible.

Go Shopping

Refresh your home with stylish products handpicked by HGTV editors.

On TV

Luxe for Less

12pm | 11c

Home Town

1pm | 12c

Home Town

2pm | 1c

Home Town

3pm | 2c

Home Town

4pm | 3c

Home Town

5pm | 4c

Home Town

6pm | 5c

Home Town

7pm | 6c
On Tonight
On Tonight

Home Town

8pm | 7c

Home Town

10pm | 9c

Home Town

11pm | 10c

Home Town

12am | 11c

Home Town

2am | 1c

Home Town

3am | 2c

Home Town

4am | 3c

Home Town

5am | 4c

Follow Us Everywhere

Join the party! Don't miss HGTV in your favorite social media feeds.