The Disclosure Lowdown: What Sellers Must Reveal (and Buyers Should Read Twice)

Selling a home isn’t just about pretty photos and a “For Sale” sign. It also means putting some cards on the table about your home’s history. That’s where disclosures come in.

Think of disclosures as the house’s “tell-all memoir.” They’re required in nearly every state, and skipping or fudging them can land sellers in hot water. Buyers, this is your chance to read between the lines and spot red flags before you fall in love with a money pit.

What Sellers Typically Have to Disclose

Most states require sellers to share material facts: anything that could affect a buyer’s decision to purchase or the home’s value. Some common items include:

• Roof leaks or past repairs

• Foundation cracks or settling

• Flooding history or water damage

• Pest infestations (yes, termites count)

• Hazardous materials like lead paint or asbestos

• Past insurance claims

Minor quirks, like a squeaky floorboard or that closet light that only works when you jiggle the switch, usually don’t make the list.

How the Disclosure Process Works

Timing matters:

• Sellers usually complete a disclosure form provided by the state or local board.

• The form is delivered early, often right after an offer is accepted.

• Buyers then get a set period to review, ask questions, and schedule inspections.

Think of it as the first chapter of due diligence: the disclosures guide where buyers should look deeper.

What If a Seller Leaves Something Out?

Withholding information is risky. If a seller fails to disclose a known material issue, the buyer may:

• Cancel the deal during inspections

• Renegotiate the price or demand repairs

• Sue for damages after closing

Courts don’t take kindly to “forgetfulness” when it comes to flooded basements or cracked foundations. Honesty is cheaper than litigation.

For Buyers: How to Read Disclosures Like a Pro

Don’t just skim. Slow down and read disclosures with a detective’s eye. Ask:

• Does anything look vague, like “some water intrusion” instead of “basement flooded twice in 2020”?

• Are there repairs mentioned but no receipts to back them up?

• Do the disclosures line up with what you see during showings?

When in doubt, follow up with direct questions and inspections. Disclosures aren’t the end of the story; they’re the starting point.

Material Facts vs. Minor Stuff

A good rule of thumb:

• Material facts = things that affect value, safety, or usability (flooding, mold, structural problems).

• Minor stuff = everyday wear and tear (scuffed paint, a dripping faucet).

Buyers shouldn’t panic over the small stuff. Sellers shouldn’t hide the big stuff.

Common Red Flags in Disclosures

Here’s what might jump out:

• “Roof repaired” without dates or details

• Evidence of foundation patching

• A history of insurance claims for water or fire damage

• Notes about neighborhood flooding or drainage issues

• Mentions of pests, especially termites or rodents

Each one is a cue to dig deeper, not necessarily a deal-breaker.

State-by-State Differences

Disclosure rules are not one-size-fits-all. For example:

• California requires detailed natural hazard reports.

• Florida sellers must disclose sinkholes and flood risk.

• Some states have “buyer beware” laws with fewer mandatory disclosures.

Bottom line: rules vary. Always check with a local pro about what’s required where you live.

Bottom Line

Disclosures aren’t paperwork to breeze through. For sellers, they’re your shield against future lawsuits. For buyers, they’re your cheat sheet for spotting trouble before it costs you thousands.

Play it straight, ask good questions, and use disclosures as the roadmap they’re meant to be.

Until next week!