What Is A Disclosure Statement When You Write A Real Estate Contract?
It seems to me that whenever buyers and sellers have a disagreement over a real estate contract, the origin can usually be traced back to poorly written or missing property disclosure agreements.
In the State of Florida, home sellers have to disclose to the buyer (in writing) anything that might materially effect the value of the home. This is usually provided to the buyer before a real estate contract is executed, but if not, the buyer certainly must approve of the disclosure during his due diligence period.
So for future home sellers who want to know "what is a disclosure statement" and how to do one properly, here is something to consider:
Real Estate Contract Requires Disclosure Forms
Whenever you execute a residential contract for real estate in Florida, pay close attention to the seller's property disclosure.
As a buyer, it will tell you most of the reasons why the home is not perfect (and no home is perfect) and what you should pay very close attention to during your due diligence period. Items should include structural defects, past repairs and modifications, material defects, possible easements, neighborhood issues, issues with appliances, and anything else the seller might think could negatively impact the value of the property.
As a seller, you might think that hiding something from the buyer makes sense, but it does not. The buyer will get the home inspected and find most of these concerns on his own. The ones that he does not find, he certainly will discover after he purchases the home. Why create the potential for a future lawsuit by hiding a known issue with a home?
The fact is, I have rarely seen a buyer back away from a real estate contract due to an item on a disclosure form, yet I have seen many a real estate contract fail to close due to the discovery of nondisclosure.
Real Estate Contract With Improper Disclosure
Think about it.
What will a buyer do when they discover you knew about a problem?
If they find out before the deal closes, they will most likely cancel the real estate contract as they will be concerned that you are hiding something else. And when they do cancel the contract, they will expect you to reimburse them for their costs incurred to find out what you already knew and were legally obligated to communicate in the disclosure agreement, right?
Ultimately, if there is a problem with the property that you know about, fix it or adjust your asking price accordingly.
If you decide against correcting the issue, document the problem in the disclosure agreement that you provide before or with the real estate contract and it likely will not impact your ability to sell your home.