FAQ – Condition
Property Flaws, Inspections, Warranties – and Home Seller Disclosure Requirements
One of the most common questions we get from home sellers concern what things you should (or shouldn’t) repair, and what things you do (or don’t) have to disclose to buyers.
Q. What things do I have to DISCLOSE to home buyers? What do you have to tell buyers?
Multiple laws require you, as the seller, to disclose a variety of things to a home buyer depending on your home’s age, location, presence of a homeowners association, and a multitude of other factors. Space won’t allow us to cover them all, so we offer some basic principles here.
One: The primary Maryland disclosure form, 4 pages, is actually a Disclosure/Disclaimer form. This means you can either answer detailed questions on the first 3 pages (“disclose”) or skip those questions and only sign the 4th page (“disclaim”). If you “disclaim” you are essentially telling the buyer that you prefer not to discuss your home’s condition. Such a disclaimer may arouse suspicions – buyers may think you are hiding something – we think in most cases it’s a better strategy to make disclosure.
Two: Your duty to disclose is based on your knowledge of existing problems, not on what you “suspect” may be a problem. Should you have a pre-sale home inspection to discover possible property flaws with your home? Generally no. For example, perhaps you feel the roof may be old or in need of repair. You are not obligated to disclose your beliefs or feelings. However, if a home inspection establishes the roof does have problems – now you either need to make repairs or disclose. We’ll address in a later blog some circumstances where a pre-sale home inspection may make sense.
Three: Disclosure laws are ever-changing, and can come from federal, state, or local governments. They vary on the location of your home, it’s age, and more. If you’d like to know exactly which disclosure laws apply to your home, go to our Contact Us form, provide your name and address and ask for “Disclosure Forms for my home”. Or call l 443-574-5320 and ask for the disclosure forms that apply to your home’s address.
Q. Should I get a Pre-Sale Home INSPECTION?
Your home probably has flaws you don’t know about. So, is it smart to get a professional home inspection before your home goes on the market? That depends.
If you are committed to fix whatever items show up in the pre-sale inspection report then, yes, it’s a good idea because now we can market your home as pre-inspected (and repaired). However, if you are not certain you would fix everything that shows up on a pre-sale inspection report, then you you likely don’t want to get a pre-sale inspection. Why not? Because, so long as you are truly unaware of a problem you have no obligation to disclose it. Once you have knowledge of a problem, you have a duty either to repair it or disclose it.
Q. What’s a 1-Year Home WARRANTY? (And, should you buy one?).
You can insulate yourself from some repair expenses by agreeing to buy a 1-year warranty.
Home warranties aren’t insurance policies. They’re service contracts. Like a service contract that covers repairs to your computer, a home warranty is a company’s agreement to pay for fixing — and, if necessary, replacing — specified home components. A warranty typically covers kitchen appliances, plumbing, water heater, furnace, sump pump, whirlpool tub, and ceiling and exhaust fans. Optional items can be added, including pools and septic systems. Various companies sell a 1-year homeowner warranty to protect the buyer of your home for 12 months after the sale, with a cost of around $450-550. For an additional cost of only $50 or so you can add seller coverage that protects you during the sale. If expensive repairs are uncovered during the inspection – and you’ve already chosen upfront to buy a home warranty – those repairs usually won’t be considered “pre-existing conditions”. We’ve had many sellers be happy to pay a $100 warranty deductible to avoid paying thousands to replace a furnace, water heater, etc.
As always, free to contact us when you have any real estate questions, about timing or anything else. Call 410-935-0386, or email [email protected]. Thanks!