Maui Homes Guide - Chapter 24 - Seller Disclosure Report

One of the most important documents in the home buying process is the seller disclosure report; review it carefully.

Most seller disclosures are made using a standard form, upon which the seller will check-off features of the property and describe their condition. If the home has not yet been built, there won't be much to disclose by the developer, though its good to know about things like soil type, previous use of the property, possible future use of neighboring land, and the developer's intentions regarding existing trees, waterways, and natural areas.

What you read may well impact your decision whether to make an offer or not. To learn more about a topic noted in the report, request it in writing. If the disclosure form is received after making an offer, you can cancel the deal if you don't like what you read. If a problem pops up even after the sale has closed that you believe the seller knew about but didn't disclose, you have legal recourse if necessary.

A Standard Disclosure Report

The typical disclosure form is a few pages long and describes features like appliances, foundation, roof, and other structural components such as electrical, water, heating, and sewer. Trees and other natural hazards such as flooding and seawall conditions, along with environmental hazards including lead, asbestos, mold, radon, and zoning, should be noted.

Some disclosures also cover legal issues, such as ownership problems, legal disputes concerning the property, or association fees. 

Disclosure Requirements May Vary

State to state, disclosure requirements often vary. Your Realtor should ensure the seller complies with the laws affecting the subject property. If the standard form doesn't mention flooding, the seller doesn't have to either, but they should be transparent if asked. Even in nondisclosure states, buyers can and should make a seller disclosure report a part of the purchase. Some agents include the sellers' disclosure in the MLS listing, while others let the buyer know that the seller will provide a report once the offer is accepted. 

Penalties For Failure To Disclose

Most states place power in their disclosure laws by allowing buyers to cancel the sale if the seller does not provide full transparency. Some states also assess monetary penalties to sellers who violate the laws or take punitive actions on the real estate agents for failing to disclose problems that they observed or were told of by their clients, the sellers.

Review The Sellers Inspection Report

Some sellers voluntarily provide copies of inspection reports that they commission themselves, either pest reports and general inspections. Theoretically, the report is completely unbiased as it was drafted by a third-party professionally licensed or certified inspector, right? Well, maybe! The quality of home inspectors varies widely, and you are gambling a bit on the seller's choice. 

Remain well-informed, read everything, ask questions, and insist on clarity.

Anthony Freda | RS-74661 | Keller Williams Realty Maui Aloha Group Maui | 808-990-2961