Monday, October 1, 2012

Selling Your Austin Texas Home Seller's Disclosure Faqs

Maybe the most important thing you will do when selling an Austin, Texas home is to fully disclose all you know about its condition. Here are some key questions and answers about your sellers disclosure.

What should you disclose?
Obviously, you cannot disclose anything you do not know.
Being transparent, i.e., hiding nothing that is material or of any substance, is vital. If you know something that reflects the actual condition of the property, the land, the neighborhood, etc., disclose it! Material facts include known problems and defects (systems and appliances, past or present termite activity, foundation issues, and environmental hazards); local developments that might affect property value; law suits or deaths affecting title; flood zone or drainage issues; encroachments or boundary disputes; repairs done without permits. (Note: The items in this list are given as examples of things that should be disclosed. If you have a question about disclosing a particular item, get the advice of a real estate attorney.)
If you learn something material from a previous attempt to sell your home (from an inspection report, e.g.), update your seller's disclosure with the new information.

Why make a full disclosure? Here are three reasons to do so, even if you might get less for your home or have to make some repairs you do not want to make.
Your disclosure is required by Texas law.
Your disclosure informs and educates the buyer. A client of mine carefully prepared his disclosure. The buyer's inspection report, however, turned up some items that he did not know previously. These included active termites, moisture in a bathroom wall and a pinhole in a bathtub. Armed with the disclosure, his inspector's report and his personal study of the home, this educated buyer lawfully terminated the contract.
Your disclosure protects you from possible legal jeopardy. The seller's disclosure on a renovated home a client was buying said that there were no foundation issues. On our first home visit, I pointed out several cracks in bricks and mortar around the home's exterior, and said that they might be signs of foundation problems. Still, my client liked the home and we negotiated a contract. His inspector highlighted the foundation as a serious issue. At a later home visit, we noticed that the foundation slope changed sharply several feet from the rear of the home. Did the seller know? It seemed probable since he had personally done most of the renovation work, and the carpet in this area had been replaced. Can you spell jeopardy? My client wisely opted out of the contract.

How is the disclosure to be made? In the Austin area, three groups (Texas Real Estate Commission, Texas Association of Realtors, and Austin Board of Realtors) provide disclosure forms. Though all three forms meet or exceed the legal disclosure requirements, the TAR form seems to be the most commonly used. No matter which form you use, complete it fully and carefully. Your initials, signature and the date you prepare it are required on the form, as are the initials and signature of the buyer that acknowledge its receipt.

When is the disclosure to be made? The sales contract will specify if the buyer has already been received your disclosure, or if you must provide it within a certain time frame (usually 2-3 days). Best practice? Complete your disclosure before putting your home on the market. It can then be made available to agents and prospective buyers, both in the home and online with the MLS listing.

The what, the why, the how and the when of disclosing your property's condition are all important. In your sellers disclosure, be transparent, be complete, be careful and be timely.

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