Residential Property Disclosures
When selling your home, you’re obligated by law to disclose certain information about your property. Most states require that all sellers complete a written property disclosure form.
In Arizona, the form that we use as licensed agents is the SPDS which stands for Seller Property Disclosure Statement. This form has a required set of questions that must be answered by the owner(s) of the property. The form is shared with potential buyers, to help them make an informed decision about the condition of the property, as well as things around the property that may affect its value.
Most states require sellers to complete this form when listing their home for sale. It is one of the first forms I have my clients complete, so we are aware of any issues that may need to be disclosed in the MLS, and it also give us a point of discussion, for anything potential buyers may not like. Nearly all of the questions are a basic Yes Or No response, with a few that will ask for additional information. The questions address material facts, major defects, special disclosures, and federal disclosures. All forms vary by state and require different information depending on State Laws in your area.
A material fact in real estate is defined as a fact that, if known, might have caused a buyer of real estate to make a different decision with regards to remaining in a purchase contract, or as to the price they may have paid. Material facts include things such as the age of the property, it’s condition, any known problems, and also any known defects. These are all types of information that would influence a buyer’s decision to purchase a home or piece of property. These disclosures require you to address known defects, things that are reasonably apparent, to ensure you don’t knowingly hide a major defect. Always when in doubt, disclose it!
All major defects MUST be disclosed. For instance, fire or flood damage. If your home’s electrical system isn’t up to code, and you’re aware of this, it must be shared with potential buyers. Repairs you have completed, as well as improvements and upgrades, should be noted as well. If you remodeled and it required local building permits to be pulled, you’ll need to disclose these items.
It is important to note, that there are different disclosures for different areas. Here in Metro Phoenix, there are specific disclosures you would use in one City, that don’t apply in another City.
Since all states have varying federal and special disclosure laws, it’s imperative that you reach out to your REALTOR® to get assistance with the sale of your home. They’ll have a copy of the required disclosures and can assist you to ensure you don’t find yourself in hot water, legally, if an important disclosure isn’t shared with buyers, and the buyers come back and file a lawsuit against you.