Disclosure. A simple term that's mostly misunderstood, and yet extremely important, when it comes to buying or selling Florida real estate. It encompasses a variety of situations and is often confusing. To most, it means relating what you know about your home's condition. In real estate, it means that and much more. It also includes the possibility of uncovering other issues which may affect your ability to easily sell your home of which you are unaware.
The Most Common Disclosures
Sellers Real Property Disclosure
Every seller is obligated to disclose to a potential buyer all known facts of a property being sold that may materially and/or adversely affect the value of the property that may not be "readily observable." The Sellers Real Property Disclosure form will assist the seller in complying with Florida disclosure requirements and will assist the buyer in evaluating the property being purchased. Here is where the seller tells the history of his home's condition, repairs made, and items still needing attention. Buyers will look to this disclosure to find information about current problems with the home, or problems that have arisen in the past and been corrected, especially if they were of a major nature i.e., roof replacement from hurricane damage.
Condominium and HOA Disclosure
If the property is located within a condominium or homeowner's association, or both, then that must be disclosed to a potential purchaser. Therefore, sellers should complete these forms "at the time" of executing the listing agreement and buyers should "not" sign a sales contract without first reviewing the HOA and Condo disclosure forms. If a buyer does not receive a copy of the these disclosure forms at the time of writing the contract, then for three (3) business days thereafter, the buyer has the right to "cancel" the contact to purchase. For more information, see our Condominium and HOA Documents page.
Lead Based Paint Disclosure
This disclosure only pertains to older homes built "prior to 1978" and is mandatory as a Rider to the Sales Contract. Therefore, if a home is built prior to 1978, then a seller should complete the Lead Based Paint Disclosure as part of the listing process. For more information, see our Lead Disclosure page.
Other Contract Inspections
The contract also permits home, termite, radon, and mold inspections by a buyer to determine the presence of defects, infestation, or contaminated air. It is more common, than in years past, that buyers will request these inspections before completing the purchase of a property. It could save a seller a "lost" contract by determining in advance any potential problems and correcting them before the buyer makes an offer.
For sellers, just think about that first offer with the request for a home inspection - when was the last time you inspected your attic for pests? If you are selling your home you'll want to know ahead of time about potential hidden problems and correct them before you present your home to the public. Almost all contracts include the contingency condition for an inspection, and most buyers are going to insist that the inspection be conducted by a professional home inspector they hire. If the buyer's inspector finds a problem it can easily cause the buyer to get cold feet and the contract may fall out. At best, surprise problems uncovered by the buyer's inspector will cause delays in closing, and usually you will have to pay for repairs at the last minute, or take a lower price on your home. For more information, see our Home Inspections page.
More and more often, radon is being found in many of Southwest Florida's homes. Radon is a frightening situation to a buyer and by conducting a 90 day test before putting your home on the market – you'll know for sure, if you'll need to perform radon mitigation.
The State of Florida approves all radon mitigation companies and typically an ERV unit is placed in the home which is a very high air quality system for removing radon and other pollutants from the air. The cost is approximately $3,000 to $5,000 and well worth the nightmare of losing your perfect buyer. For more information, see our Radon Disclosure page.
Buyers now request this test also – more common than in previous years. So, save yourself the aggravation of finding out from a buyer's inspection report that your home may have mold. Mold remedies vary depending upon the cause – but if you conduct an inspection for mold, discover you have it, and then do not disclose to potential buyers, you could be in for trouble. For more information, see our Mold Disclosure page.
Again, a very inexpensive test, approximately $125 to put your buyer's mind at ease – and yours. Termites are common in Florida, so it's unlikely that you would receive an offer without this inspection request.
So, we're sure you can tell that disclosure is a very important part of any real estate transaction. By knowing what to look for, you can avoid problems before they arise.
For more information on these real estate topics, please feel free to contact us directly. Our associates will be more than happy to assist you in answering any and all questions you may have.
Florida Home Sellers Library
Real Estate Terms Glossary Index
Page Authored by Benjamin Dona of Gulf Coast Associates, Realtors
Questions About Disclosure in a Real Estate Transaction?