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Disclosure in a sale
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Alex and Dusty were worried about the sale of their house. They had bargained hard with the Buyers and had reached an agreement last night, but they felt at a disadvantage in today’s market. Under the terms of the Arizona Residential Purchase Contract they had to fill out a Seller’s Property Disclosure Statement (SPDS) get a Letter of Experience or a CLUE report from their insurance agent and provide both to the Buyers. Dusty wondered if these items might disadvantage them even further and was feeling a bit resentful in this whole process.
They asked their REALTOR if they could just skip filling out the disclosure statement but he seemed somewhat surprised at this request. “Dusty, the contract you signed requires you to provide a full disclosure of everything you know about the property. I can understand why you’re worried you might jeopardize the sale, but not disclosing what you know raises a bigger flag than being happy to tell all. Besides, it is your protection to disclose everything you know.” Alex perked up, “How’s that?”
“Everyone who is selling a home must disclose whatever they know about the premises, so you’re really not at a disadvantage filling this form out. But if you know something and don’t disclose it, under certain circumstances you could be liable. When you disclose, the Buyer is then under obligation to determine whether or not that item is material to them. You are not obliged to discover things you don’t know about the property, only disclose those things you do know.”
The sellers mulled this information over a bit and then Dusty grinned. “It’s just like when we took that trip overseas.” “What?” said Alex.
“You remember the long release form the travel agent sent us. She told us everything she knew about the countries we were visiting and instructed us to decide what was important to us. By the time we were done reading the form I wondered if we would be able to eat anything there. But it didn’t stop us from going, it just helped us be aware of what to look for and what to do about it. The funny thing was that after I read her disclosures about the food, I felt better about shopping and eating because I understood the risks and what to do to minimize them.”
Alex and Dusty filled out their disclosure forms completely and got them to the Buyers in plenty of time. The Buyers asked for some repairs, but our Sellers figured the Buyers would have done so anyway. Disclosure is always in the best interests of all parties in a sale, it protects you and is the right thing to do.
For More information:
Example of a Seller's Property Disclosure Statement
Every Buyer is entitled to an SPDS by Michelle Lind
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