What Do I Need To Disclose When I Sell My Property? How Important Is Disclosure?

By Shayne Bowen

I have heard about recent examples of sellers having to pay judgments of $30,000 to over $750,000 for failure to disclose! That should get anyone’s attention! This is serious business!

Thank goodness that we have ever been involved in something like this – but there is a reason! We are semi-fanatical about stressing to our clients the huge importance of full, very detailed, high-quality disclosure to the buyer!!!!! We are known in the industry as people who are highly meticulous about advising our clients to be really, really aware of the huge importance of full disclosure.

Full disclosure helps reduce the chance of a lawsuit and a money judgment (believe me, sellers almost always lose this type of lawsuit!). Failure to disclose, inaccurate disclosure, or sloppy disclosure can certainly cause a seller to face a lawsuit, and a significant dollar judgment!

Disclose fully and meticulously, sleep well, and never think again about the sale of your home. Disclose partially, or sloppily, keep a watch on your mailbox for the court subpoena announcing that you need to retain an attorney because youíve been sued! Itís so easy to avoid all problems in this area, but in order to avoid large or even catastrophic losses, we advise that you consider the following guidelines.

Of course, we are not attorneys, and we cannot give legal advice. Please consult with a real estate attorney when you need legal advice, and if you have questions as to how to properly fill out disclosure forms.

Consider These Important Disclosure Guidelines

3 "Buckets"

We strongly advise that our clients disclose everything that they can remember and have any knowledge of in three "buckets":

  • Bucket 1: Current Defects (things that are currently defective or broken).

  • Bucket 2: Prior defects (things that were broken in the past, but are now repaired).

  • Bucket 3: Upgraded features (things that are optional, upgraded features, things that were not defective, but that you wished to simply improve  - e.g., new carpeting, new paint, added a room, new dishwasher, added a new patio, new counters, new faucets, etc.).

Plus, we strongly advise our clients to follow these additional important disclosure guidelines, and to consult with a real estate attorney for any questions that they might have on how to correctly fill out disclosure forms:

  1. Important: Do not limit yourself to the space included in the disclosure forms! Write, or even better, type on your PC as many additional disclosure comments as necessary. Do not skimp – more disclosure is better than less! Example: Click here for an example of a seller typewritten disclosure.

  2. The format for any disclosures that you type up in a separate document should 1) disclose the faulty item; 2) disclose whether the item was or was not repaired, and by whom; 3) disclose whether the problem has reoccurred again; 4) disclose whether you obtained a permit. 5) include this text with each disclosure: "If buyer is concerned, they are advised to check with an appropriate expert." Example: Click here for an example of a seller typewritten disclosure.

  3. Even if an item has already been repaired, you still need to disclose that it was faulty in the past, and then repaired! Example: "My roof leaked last year. A roofer repaired it. It has not leaked since, to our knowledge. We did not obtain a permit for this repair, and we do not know if one is required. If the buyer is concerned, they are advised to check with an appropriate expert."

  4. Use the phrase "to our knowledge" often in your added disclosures on the separate typewritten disclosure, unless you are CERTAIN of an answer.

  5. If in doubt, DON’T leave the item out. No matter how minor the flaw, include it in your disclosure!!!

  6. The forms ask if you are "aware" of a given defect. Make very sure that if the correct answer to a disclosure question is "Yes," that you answer "Yes."

  7. Since many of the questions on the forms raise lots of questions, many of our clients make a note of the questions that they have questions on, and then contact us to help them understand the question. We can't give legal advice, but we might be able to help you understand the question. If you need legal advice, we will be happy to provide you the names of several local real estate attorneys.

  8. Remember the key phrase "material fact." The law states that all "material facts" must be disclosed. What is a "material fact?" A "material fact" is ANYTHING that could affect the value of desirability of the property in the buyer's eyes, whether or not there is a specific question on the disclosure forms regarding this item. Note: Things that "could affect "the value of desirability of the property in the buyer's eyes" is a very broad category. If a flaw or concern in any way affects "the value of desirability of the property in the buyer's eyes," we strongly advise that you disclose it. Do not skimp – more disclosure is better than less, even tiny flaws!!

  9. If you have to ask yourself whether you should disclose something, generally speaking, you've just answered your own question: "YES, disclose it!!"

  10. If you forgot to include something in your initial disclosure papers, do not think that that it’s too late. If you think of something later that you unintentionally omitted, disclose the new item(s) in writing, prior to the close of escrow, no matter how minor this item is.

Follow these guidelines and you may help reduce the potential of problems in this area.

A little conscientious homework now might save you tons of potential cost and worry in the future!

IMPORTANT: We are not attorneys, and we are not qualified or licensed to give you legal advice. If you have any questions on the legal aspects of disclosures (or anything else pertaining to our transaction), please contact a real estate attorney (not a general attorney). If you need a referral to a real estate attorney, please let us know. We will be happy to send you the names of several local real estate attorneys. Of course, you are free to use ANY attorney you wish, and you are NOT limited to a list of attorneys that you may have requested from us.


Let us know if you have any questions in regard to the disclosure papers.

Secondly, please fill them out very thoroughly, completely, and meticulously. And remember to type additional disclosures as needed. Click here for an example.

Over-disclose rather than under-disclose!

Doing so could save you all manner of problems in the future!

Warm Regards,

Shayne Bowen & Staff