Specialized Buyers Agent Answers Real Estate Questions
Q. We are shopping for a new home and want to do it the right way. So we always ask to see the “Seller’s Disclosure” for the home before we go to see it. Sometimes they do not have one or if they do, it is not filled out very completely. Isn’t there a law that requires this for every home? D. and P. Randolph, Narberth, PA
A. I am all about careful analysis before buying a home but I do question a bit your need to see the detailed list of all the home’s issues before you have even walked through the door! That might deter you from seeing a home that would be perfect for you where the sellers were just overly cautious in filling out the form. I usually get the seller’s disclosure for a home if my clients have seen the home and may possibly make an offer.
These forms, while required by law, have the effect of protecting the sellers more than the buyers, in my opinion. They give the seller an opportunity to put the buyer on notice of a list of issues about the roof, basement, heating and cooling systems, radon and termite problems, etc.. Not everyone has to give them out, though. Builders who give a warranty do not have to do so, nor do sellers of estates—where the owner has died and the heirs did not live in the house. Sometimes a divorcing couple may give one where the one owner does not sign because he or she has not lived in the house for a long time and cannot really state what the present condition is (although they may know of past problems). And they do not cover everything you might care about, either.
Because the standard agreement of sale has a clause that in effect “erases” any claims for problems after the house is bought, this separate statutory right of action is arguably the sole recourse available to a buyer who runs into problems after closing. The problems must be “material” or of a nature that they pose a “health or safety risk”—so not everything is covered. And my understanding is that cases under this law generally hold that the sellers must have actually known and lied about the issue on the form in order for the buyers to collect any money.
Interestingly, the statue provides a form that is acceptable for use that is not as comprehensive as the standard form promulgated by the state Association of Realtors and used by most agents, so most buyers are getting this expanded form of disclosure. There is also a proposed change to that law requiring selling agents to disclose material defects to buyers that their sellers failed to disclose if they actually know about them.
So I treat the seller’s disclosure as a litmus test to provide me with a list of things to have my buyer’s inspector look at closely. I judge a seller by the attention they seem to have paid to the form and how much they have disclosed. In a way, I see a thorough disclosure, rather than a red flag, as an indication of an honest seller. And if it is not completely filled out, I require that be done during the inspection period so we have the correct information.
I do not consider the seller’s disclosure as any form of guaranty that the house will be perfect, though. No house is perfect, and there is always some risk when making such a large and complicated purchase. The idea is to reduce the risk as much as possible. Use an agent with a good “eye”, read the form, ask questions and have your inspector look at any problems that have occurred in the past to be sure they have been corrected.