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Understanding Real Estate Disclosures: What Buyers and Sellers Need to Know

Real Estate Terms Explained The Mark & Al Team March 26, 2025

When buying or selling a home, transparency is key. Real estate disclosures provide critical information about a property’s condition, helping buyers make informed decisions while protecting sellers from legal disputes. However, many people are unaware of what must be disclosed, leading to potential complications during a transaction. This guide will break down real estate disclosure requirements, what buyers should look for, and how they impact the home buying and selling process.


What Sellers Must Disclose

Sellers are legally required to provide full and accurate information about their property. While disclosure laws vary by state, some common disclosures include:

  • Structural Issues: Problems such as foundation cracks, roof leaks, or past termite damage must typically be disclosed.

  • Water Damage & Mold: Sellers must disclose any history of flooding, leaks, or mold problems, even if they have been repaired.

  • Environmental Hazards: Properties near hazardous waste sites, with asbestos, radon, or lead-based paint, often require disclosure.

  • Repairs & Renovations: If major repairs or renovations have been made, buyers should be informed about the nature and extent of the work.

  • Legal Issues & Liens: If the property is involved in legal disputes or has unpaid liens, this must be disclosed.

  • Death on the Property: Some states require disclosure of deaths that occurred on the property, especially if they were due to violent circumstances.

Failing to disclose known issues can lead to legal consequences, including lawsuits from buyers after the sale.


What Buyers Should Look For

Buyers must carefully review all disclosures to ensure they fully understand a property's condition. Key steps include:

  • Requesting a Seller’s Disclosure Statement: This document details known property issues and should be reviewed before making an offer.

  • Identifying Red Flags: If disclosures mention major repairs, recurring problems, or environmental hazards, buyers should proceed with caution.

  • Asking Questions: Buyers should not hesitate to seek clarification on any disclosed issues and request additional documentation if necessary.

  • Considering Future Costs: If a home has had frequent repairs or structural issues, buyers should factor in potential future expenses.


Contingencies & Inspections

Disclosures play a key role in home inspections and contract contingencies. Buyers can use disclosures to:

  • Request Additional Inspections: If disclosures mention past issues, hiring a specialized inspector (such as for mold or foundation concerns) can provide further insights.

  • Negotiate Repairs or Price Adjustments: If significant issues are disclosed, buyers may negotiate with sellers to lower the price or make necessary repairs before closing.

  • Back Out if Necessary: If a major undisclosed issue is discovered, buyers may have the right to withdraw from the contract under the disclosure contingency.


Final Thoughts

Understanding real estate disclosures is crucial for both buyers and sellers. Sellers should be transparent about their property's condition to avoid legal complications, while buyers must carefully review disclosures to make informed decisions. Working with an experienced real estate professional can help navigate disclosure requirements, ensuring a smooth and fair transaction for all parties involved.

If you’re buying or selling a home and have questions about disclosures, reach out to a trusted real estate expert to guide you through the process.

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