Seller’s Property Disclosures… Serious Business

June 6, 2019 — By

Whether listing a home to sell or looking to buy, the Sellers’ Disclosure is a critical piece of information. It can seal or kill the deal. It can be a source of contention or a foundation for trust. Or worst case, it can be a basis for litigation.

Typically we ask all Sellers to complete a Seller’s Property Disclosure, distributed by the Georgia Realtor Association. The form covers questions about the property that the prospective Buyer could most likely not uncover for themselves. Some of these conditions could be considered “material defects” The Seller answers by simply checking “Yes” or “No” in the appropriate column. (A “Don’t Know” column has been eliminated in recent years.) The whole idea is to protect both parties from accusations of misrepresentation or fraud after the closing.


For Sellers Honesty is the best policy

We encourage Sellers to follow three rules of disclosure: 1. Disclose. 2. Disclose. 3. Disclose.( By the way, “I don’t know” can be legitimate. However, without a box to check on the form, Sellers who really don’t know will have to write those words out as an explanation on the form.)

In Georgia, sellers are required to honestly answer any Buyer’s questions about the property. (Unless, of course, the question is about housing discrimination which is protected under the Federal/State Fair Housing Act.) The Seller’s Property Disclosure can answer some of the most basic questions but not all of them. If Buyers have additional questions, and they should,we encourage them to ask in writing, We ask the Sellers to respond likewise. Written communication is the best way to document the discussions, being sure each party understands and is satisfied with the answers.  

What Buyers look for

Many times, the first things Buyers look for are the ages of the house, the HVAC systems and the roof. Those are typically the more expensive replacement items. Water intrusion that has not been corrected can be even more expensive if it’s been extensive.

Sellers and Buyers both need to carefully consider the “Features Check List” of the SPD. Sometimes a Seller may not include items that they know the Buyer will expect to be included in the sale. This maybe intentional because the Seller hopes to use the item as a bargaining chip in negotiations or it could simply be an oversite. If something is missing be sure to ask your agent to check with the Seller.

Reading the document carefully is important. Considering the phrasing and meaning. For instance, when the Disclosure asks about mold, radon or any other potentially toxic environmentally hazardous substances the key words are “adverse test results”. This doesn’t mean there are no hazardous substances. It means that to the Seller’s knowledge there have been no tests.

Sellers can make honest mistakes

Honest mistakes can become a problem for all parties.  Below are some areas where our team has seen unintentional problems occur. In most cases the issues get worked out (with help from a good agent)

Sewer or Septic? This is not a place for a “don’t know” explanation. If sewer service has never been paid, there is probably a septic tank on the property somewhere. Find someone to check it out.

Termite Bond: “Repair” or “Repair and Replace”? Don’t guess. Pull the bond out and confirm the coverage type. Guessing “re-treat and repair”, when it’s not, could cost big bucks to upgrade once the Buyer checks it out.

Permits: If you needed one and did not get it, say so. That is not so unusual. People sometimes do work without obtaining a required permit. However, if checked “No” (meaning no work requiring a permit was done without a permit) but the county clerk can’t produce a record of it, the Buyer could withdraw the offer. Even if they go forward, they will have trust issues about everything else on the disclosure.