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Seller's Disclosure: Avoid a $10,000 Mistake...

Posted September 15th, 2009 under pitfalls, smart selling.

When you sell your home, you may be asked to fill out something called a Seller's Disclosure Form, where you must list any significant damage and repairs in your home.

This disclosure is used to warn potential buyers of flaws in the home, which — in theory — protects you from liability. But in practice, it can actually have the opposite effect! In legal terms, by filling out the form, you are saying “this is an accurate list of every flaw in this home”. If you make any mistakes or omissions, you are liable for your errors — and mistakes can happen easily.

For example, say you perform a repair on your bathroom to fix a leak. You would then write on the form that the leak has been repaired. But what if you have misidentified the source of the leak, and the water damage re-appears a month after the deal? You would be liable for the repairs, because you claimed the leak was fixed.

This liability can cost you hundreds, thousands, or even tens of thousands of dollars! The good news is, the Seller's Disclosure Form is not mandatory. I strongly recommend you do not fill it out. Instead, let a professional home inspector detect any flaws.

Got a question about repairs, damage, or liability? Just ask me, I'll be happy to help.