The seller’s disclosure form: everything you need to know

When you’re touring a home, you only see a property at its best. When organized, clean, and expertly staged, many homes can seem picture perfect. But what you’re not seeing? The past flooding, the repeated problems with plumbing and the rat infestation? Those are the things that will cost you in the end.

That’s where a seller’s disclosure form comes in. Designed to give you insights into a home’s defects -- both past and present -- it can help you make a more informed buying decision, not to mention save you in repair bills down the line.

Why is the seller’s disclosure form important?

The purpose of the seller’s disclosure form is to inform and protect you as a buyer. It allows the seller to detail any existing or previous problems with the home, land, or property, so you can decide for yourself if those issues are something you’re willing to take on -- and pay for.

Seller’s disclosure forms also list any upgrades, renovations, or construction work done on the home. You -- along with your home inspector -- can use this info to verify that projects were done properly and per local building codes.

The disclosure also protects the seller. Because you’re required to sign off on the form before purchasing the home, you’re unable to take legal action against the seller if a pre-existing condition impacts your property.

What’s included on a seller’s disclosure form?

Seller’s disclosure forms vary state by state, and the federal government only requires disclosures pertaining to lead-based paint and asbestos. All other disclosures depend on local laws and regulations.

In general, though, the seller will include any defects, past or current problems, or construction done on major areas such as the roof, foundation, structure, or systems (electrical, plumbing, septic, heating, etc.)

Here are some examples of what you a seller might disclose about their home:

  • Leaks in the roof or from the doors and windows

  • Knowledge of a nearby development or construction project

  • DIY renovations or construction done without a city permit

  • Past instances of flooding

  • Any issues with utilities

  • Local environmental hazards

  • The presence of lead paint, radon, asbestos or mold

  • Problems with the electrical or plumbing systems

  • Soil contamination

  • Pest or wildlife infestations

  • Property line disputes

  • Bankruptcy proceedings

  • Recent death or crime on the property

  • Neighborhood nuisances or noises

  • Appliance malfunctions

  • Existing property liens

  • Cracks in the foundation

Essentially, anything that could potentially pose a threat to your health or devalue your property should be noted on the seller’s disclosure form. Keep in mind though, the seller may not know about all underlying issues. Or in some cases, some less than forthcoming sellers might hide them to keep the sale on track.

How does the seller’s disclosure work?

Typically, sellers fill out two kinds of disclosures. The first is a Transfer Disclosure Statement. This is where they’ll note all the damage and defects they’re aware of, like those listed above.

The second piece is a Seller Property Questionnaire. This is just a series of questions regarding the condition of the property. The seller will answer them as honestly as possible, sign off on the document, and you’ll get to review both before moving forward with your sale.

Keep in mind that disclosure requirements vary by state and city, so there may be slight differences in how seller’s disclosures come about in your area. Depending on your location, you may also see additional disclosures, like the Natural Hazards Disclosure Statement, the Megan’s Law Disclosure, or the Market Condition Advisories.

How do I get the seller’s disclosure form?

In some cases, you’ll receive the seller’s disclosure form from your agent, the seller’s agent or the seller themselves. In others, you might need to request it directly. Which group you fall into really depends on the area you’re shopping in.

In Washington, for example, seller’s disclosure forms -- also called Form 17 in the state -- are attached to each property’s MLS listing. These listings also often have pre-inspection reports, resale certificates, and sewer scope information attached as well, making it very easy to evaluate a property -- even before you see it in person.

In other states, you may need to view the property, put in an offer, and request the disclosure directly from the seller or their agent. Sellers are usually required to give you their disclosures within 3 days of accepting your offer. This varies by state and city though, and you can also negotiate a different timeline in your contract.

In these cases, there is usually a contingency in your agreement that allows you to back out of the deal if you discover something in the disclosures you’re unhappy with. If you’re OK with what’s detailed on the disclosures, you’ll sign off on them and the transaction will proceed.

What to look for on your Seller’s Disclosure Form

Sellers are legally required to report any defects they know about on the property, but that doesn’t mean they always do. You’ll want to review the disclosure forms carefully before signing anything. Remember, once you sign that document, you’re letting the seller off the hook for any issues associated with those defects. That means you’re financially responsible for any damage or future issues the defects might cause.

When reviewing your seller’s disclosure form, you should be especially careful to look at:

Any construction work or upgrades

Were they done by a licensed professional? Were the proper permits attained? Was it done per local building code? Be wary about work done by the seller (DIY) or anyone unlicensed. Not only could these projects put you in violation of local code, but they could also present a fire hazard or health risk as well.

The age of the roof

Most sellers will disclose the age of the property’s roof, but what they don’t tell you? The lifespan of the roof. A 7-year-old roof might not seem so bad on its face, but when you consider that its lifespan is just 10 years, you’re putting yourself on the hook for a new roof just 3 years down the road. Roofs can last anywhere from 10 to 50 years, depending on the quality of materials, and they’re not a cheap project. Make sure to have your inspector estimate the existing roof’s lifespan, so you know when replacement will be needed.

Crawl spaces

Are there crawl spaces under the home, instead of concrete slab? Make sure the condition of these spaces is on the disclosure. These areas highly prone to pest infestations, and they’re a breeding ground for mold and other moisture-caused issues. Be sure your inspector covers these areas in the inspection report, too. Problems in crawl spaces can often lead to serious structural problems.

Animal damage

Damage done by pets, pests, or wildlife is a big red flag. If done by wildlife, it could present a safety hazard for you and your family. If pests, it means you might have an infestation on your hands. Pet damage is less worrisome, though you should use that info to evaluate the home further. Does the home also smell of the pet? Did the pet do damage to carpets or walls you might not have seen yet? Keep an eye out for other pet-related issues when you’re in the home.

Plumbing and HVAC conditions

Have there been any plumbing or HVAC issues in the past? When were they fixed? Were they fixed by a professional? Repairs to these systems are some of the most costly ones you’ll encounter as a homeowner, so make sure you know exactly what you’re getting into. It also helps to know the age and materials used in these systems. Steel plumbing can withstand a century of use, but lead pipes only last a fraction of that. The same goes for water heaters. Electric heaters tend to outlive gas ones by 5 to 10 years.

Cracks in the wall or foundation

Cracks typically aren’t just an aesthetic issue. In most cases, they’re a symptom of a larger problem -- movement in the foundation or problems with the structure of the home. You will want to have your inspector look carefully at any cracks noted on the disclosure, and, if there seems to be a lot of them, maybe even bring in a structural engineer to verify the safety of the home.

Liens, restrictions, or easements

Existing legal actions or liens on the property are usually a deal breaker -- at least if you want the home anytime soon. Make sure to have a qualified real estate attorney look into the property if any of these issues are on your disclosure. You need the full legal picture of the home before you move forward with the transaction.

You might see lots of minor items listed on the disclosure form, and that’s a good thing. It simply means the seller is erring on the side of caution and disclosing everything they can think of. In some states, sellers are legally responsible for undisclosed defects for up to a decade. Most sellers will want to avoid legal action as much as possible.

Do I still need an inspection if I have a Seller’s Disclosure Form?

No matter how thorough it seems your sellers have been on their disclosure form, you will still want a comprehensive, professional inspection of the home.

Home inspectors are specially trained to identify issues in your home -- issues that could pose a health risk or cost you tons in repair bills. In most cases, they find items that the sellers weren’t even aware of.

Best of all, home inspections can often be used as a negotiating tool. When issues crop up on the report, you can use those findings to re-negotiate your deal. Ask the seller to make the repairs themselves or drop the sales price to account for them. It’s a win-win: confidence that you’re buying a safe, hazard-free home and a lower price to boot.