In their Consumer Guide series, the National Association REALTORS® offers the basics about seller disclosures when selling a home. Seller disclosures are certain material defects – elements of a home that may negatively impact its value – that sellers must disclose to buyers in a legal document.
While specific disclosures are dependent on state and local law, sellers are typically required to list any completed repairs, information about natural hazards, property defects, missing essentials, land-use limitations, HOA guidance, deaths on the property, and any other conditions that might negatively impact the property’s value.
In Maryland, sellers have the choice to either disclose and answer questions about their property, or sign off on a disclaimer and only answer whether or not there are any latent defects. Latent defects are defined on the disclosure/disclaimer form as being material defects in real property or an improvement to real property that: (1) A purchaser would not reasonably be expected to ascertain or observe by a careful visual inspection of the real property; and (2) would pose a direct threat to the health or safety of: (i) the purchaser; or (ii) an occupant of the real property, including a tenant or invitee of the purchaser. If a seller answers “Yes” to the question about latent defects, then they are required to write in their disclosure about the defect.
The disclosures allow buyers to choose whether they want to make an offer on the house based on what the seller is disclosing about the property, or can influence the offer amount. For sellers, the disclosure can help protect them from legal liability, meaning they will not be responsible for any issue that arises on the property after the sale as long as it was previously disclosed.
If a seller knowingly withholds information regarding a required seller disclosure, there may be legal consequences. A buyer could cancel the sale or the seller could be legally liable. Sellers should be honest with details required to disclose.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
