Real estate disclosure is standard among real estate agents and investors alike. But what exactly does it mean when you see it on an application or contract? Many people don’t understand how much information their potential real estate agent must disclose to be legally considered a broker. Others are unsure whether they should be telling more or less information than the law requires. Below is everything you need to know about real estate disclosure, so you can better negotiate the terms of your deal and avoid potential conflicts of interest.
What Is Real Estate Disclosure?
Real estate disclosure is simply a legal requirement for agents and brokers to disclose any information that may impact their ability to conduct business on a client’s behalf. A seller makes a disclosure by informing the buyer about specific facts that might impact the value of a property. This can include anything from information about a property’s condition to the seller’s history with the property. The seller must disclose any pertinent information about their history with the property and all the relevant information about the history of anyone else who has owned or occupied a home before them.
Disclosure Forms
The most common type of real estate disclosure is a seller disclosure form, which the seller fills out before they put their house up for sale. This form aims to inform buyers about any problems with the home that may not be apparent from looking at it. This can include prior water damage, prior flooding, and termite damage. On the other hand, a Buyer’s disclosure is a form that a buyer fills out to inform the seller about any problems the buyer has with the property. This can include prior damage, prior flooding, and prior termite damage.
How Disclosure Helps Buyers
Real estate disclosure aims to provide buyers with important information about a property before purchasing it. This allows buyers to decide whether or not they want to proceed with their purchase. Since sellers are legally required to disclose any information that might impact a buyer’s ability to make an informed decision, real estate agents and brokers must also disclose specific information so that sellers are aware of their potential conflicts of interest. Real estate agents and brokers are legally required to provide full disclosure on their relationships with clients and third parties. This means that real estate agents must be transparent about any potential conflicts of interest between themselves, their clients, and third parties who may be involved in the transaction at some point during the process. A row of interest occurs when an agent’s financial interests may influence their professional decisions on behalf of their client.
Key Takeaways
The real estate disclosure process protects consumers from dishonest sellers, dishonest agents, and fraudulent transactions. The law requires sellers to disclose any information that might impact a buyer’s ability to decide whether or not they want to purchase a property. This includes any physical problems with the home, its history of flooding or termite damage, and the seller’s history with the property. When the seller provides this information accurately and timely, buyers can ensure that they don’t get in a bad situation with the wrong property. This means that both buyers and sellers benefit from disclosures since they help ensure that all parties know all relevant information before entering into a real estate transaction.
