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There are numerous steps involved in ensuring that a home purchase goes smoothly and legally. One of the most important steps is the disclosure phase. Whether you’re buying or selling property, it’s important to understand this obligation. Here’s what you need to know.
What Are Disclosures?
Disclosures are documents provided by the seller that reveal specific information about a piece of real estate. These documents inform the buyer of any known issue or defect with the property. In the absence of proper disclosures, a buyer may have legal recourse against the seller regarding underlying issues.
The specific disclosures a seller must make vary by state but generally cover areas such as:
- Structural problems
- Environmental hazards
- Past repairs or renovations
- Legal issues related to the property
Why Disclosures Matter
Disclosures are important because they allow for the following:
- Informed Decision Making — Disclosures provide buyers with essential information about the property’s condition and history so that buyers know what they’re getting into. For instance, knowing that a house is on a floodplain might affect a buyer’s willingness to make the investment.
- Leverage for Negotiations — Disclosures can be used as a negotiation tool. A buyer who discovers issues with the property through the disclosure documents can negotiate repairs or a reduction in the sale price. This can lead to a more favorable deal and ensure that the buyer is not overpaying for a property that requires significant repairs or maintenance.
- Transparency and Trust — Transparency is key in real estate transactions, and when sellers provide complete and accurate disclosures, it demonstrates their commitment to a fair transaction. This trust can lead to smoother negotiations and a more positive overall experience for both parties.
Common Disclosure Items
Below are some common items that are typically included in real estate disclosures:
- Structural Issues: Information about the foundation, roof, walls, and other structural components
- Water Damage and Mold: Details about any past or present water damage, leaks, or mold infestations
- Pest Infestations: History of termite, rodent, or other pest problems
- Environmental Hazards: Information about lead paint, asbestos, radon, or other environmental hazards
- Property Boundaries: Disputes or issues related to property lines and easements
- Previous Repairs and Renovations: Information about past repairs, remodels, or renovations
- Legal Issues: Any legal claims, zoning violations, or other legal issues affecting the property
Steps Buyers Should Take
To make the most of the disclosure process, buyers should take the following steps:
- Review Disclosures Carefully — Buyers should thoroughly review all disclosure documents provided by the seller. Paying attention to the details can help identify any red flags.
- Conduct Additional Inspections — While disclosures provide valuable information, buyers should consider hiring a professional inspector to conduct a comprehensive examination of the property. This can uncover issues that may not have been disclosed or known.
- Ask Questions — If any part of the disclosure is unclear or raises concerns, buyers should not hesitate to ask the seller or their real estate agent for clarification. Clear communication helps address any uncertainties and ensures that buyers fully understand the property’s condition.
- Negotiate Based on Findings — Armed with the information gathered from disclosures and inspections, buyers can negotiate more generous terms with the seller. This could involve requesting repairs, asking for a price reduction, or even deciding to walk away from the deal if the problems are too significant.
Call an Experienced Massachusetts Real Estate Lawyer Today
Are you thinking about purchasing real estate in Massachusetts? Then contact our experienced team at LaFountain & Wollman P.C. to learn more about essential disclosures and protect your investment.