Home repairs are part and parcel of home ownership, but when it comes time to sell, does a home disclosure have to include those repairs?
It can be a conundrum. Buyers want (and deserve to have) a full picture of the house they're buying and the condition it is in. However, disclosing a previous home repair may actually turn off a potential buyer. A foundation that's had repairs for leaks several times over in recent years, for example, may signal to the buyer that they could have a major water problem on their hands. Both legal and ethical considerations come into play when you're debating whether or not to 'fess up to a previous repair. So let's dig in!
What do you have to disclose to the seller?
Federal seller disclosure laws require sellers to be open and honest about the existence of lead-based paint in a home, but most laws regarding what a seller must share with a buyer are made at the state level. That means your state may or may not require that you disclose a previous repair, says Kathryn Bishop, a Realtor® with Keller Williams in Studio City, CA. To find out the laws in your state, do a search online for "[your state] seller disclosure laws."
Does home disclosure include a previous repair?
In Bishop's home state of California, law dictates that every significant repair made since purchasing a property needs to be disclosed. Your real estate agent will be able to advise you on what regulations must be followed in your state, so it's best to disclose a previous repair to them at your first meeting about the sale. And note there are some exceptions to the law. You don't have to share every single fix made in all the years you've lived in a house—just the big ones.
"I don't mean when you've changed a faucet washer," Bishop clarifies. "I mean when you had to repair a plumbing break."
Nor do you technically have to disclose work done by the previous owner, even if they disclosed it to you. That said, many experts advise that sellers share that information too.
Because they might very well find out on their own, anyway. During the home inspection phase, buyers may request a copy of your Comprehensive Loss Underwriting Exchange (CLUE) report—a free report that details every claim made to your homeowner's insurance in the past seven years. And even if you paid for a repair without the help of insurance, an eagle-eyed home inspector may note fresh paint on a ceiling repaired after a plumbing leak or start asking why the hot water heater, furnace, and other basement appliances seem to be brand new. Failing to disclose any of these things could put you in serious legal trouble.
The ethical side of seller disclosure
Even when disclosure isn't required by law, or a project was done by a previous owner, Bishop still discusses disclosure with her clients. After all, you don't want the seller caught by surprise with an issue that preceded your home ownership.
"If the previous owner disclosed in writing that they had a serious case of mold and it's been cleaned up, I will advise my client who is now selling to pull out those old papers and disclose," she says. "We know that what typically happens is the new buyer moves in, and the next-door neighbor asks if the mold has been cleaned up!"
The ways seller disclosure helps you
If following the law and being ethical aren't reasons enough to disclose a previous repair, there's are other benefits to doing so, says Michele Lerner, author of "Homebuying: Tough Times, First Time, Any Time." Among them:
Buyers might prefer negotiating with sellers who have proven they are upfront with information about their home, as opposed to those who are just spinning everything to attract buyers.
Buyers want to know that sellers have maintained their property appropriately, so providing an example of your diligence in repairing your bathroom and fixing your ceiling can have a positive impact.
Your disclosure can protect you from future disputes with the buyers.
Buyers may feel relieved that you have already made necessary repairs, since that becomes one project they don't have to handle in the immediate future.
Joe Barbee – ABR,MRP
Barbee Dream Homes Real Estate Group
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This article was originally published on Realtor.com by Jeanne Sager