What is a Seller Disclosure Statement?
Seller Disclosure Statements (often called Form 17 in the State of Washington) are the buyer’s opportunity to learn as much as they can about the property and the seller’s experience in it. Potential seller disclosures range from knowledge of leaky roofs to work done without the benefit of a permit, to information about a major construction or development project nearby. Not only do disclosure documents serve to inform buyers, but they can also protect the sellers from future legal action. It is the seller’s chance to reveal anything that can negatively affect the value, usefulness or enjoyment of the property.
When and How does a Seller make a Disclosure Statement?
Sellers are asked by their listing agents to fill one out at the time they take the listing. But for various reasons some sellers do not have it completed by the time the listing goes active and prospective buyers start viewing the home. Most, but not all residential property sellers are required to supply a Seller's Disclosure Statement in the state of Washington. Personal Representatives of estates (estate sales), and banks selling foreclosed properties are a couple of examples of Seller's who are exempt.
What are Sellers Required to Disclose to Potential Buyers?
There are a lot of things covered in the 6 pages of the Seller Disclosure Statement, but not everything you might imagine. Some of the things included are:
Title condition and issues
Water and sewage systems
Main systems of the house (heating, plumbing, appliances, etc.)
Existence and details of any Homeowner's Associations (HOAs)
Environmental concerns and history (floods, soil contamination, etc.)
…. and much more!
A few things that are not required to be disclosed by law, but agents are often asked about:
Previous death in the home
Proximity of sex offenders
Political or religious activity nearby
I always recommend to my sellers it is best to disclose everything. Anything you would want to know if you were a buyer is probably relevant and a good idea to disclose. And its best for the buyer to assume if it is not mentioned in the Seller Disclosure Statement, its not covered. Anything that causes a buyer to be concerned should be investigated to the buyer's satisfaction, regardless what it says on the Seller Disclosure Statement.
Is the Seller Disclosure Statement the Same as an Inspection?
No, not at all! A buyer should have a comprehensive inspection done by a licensed home inspector who can give a completely unbiased assessment of the home and go over any issues with the buyer so that they know what they are getting into. It's not required by law, but it is absolutely recommended! A Seller Disclosure Statement is just the seller's representation, to the best of their knowledge, of the current status and historical background of the home. It's not a guarantee or warrantee. If a seller is dishonest in their representations on the Seller Disclosure Statement a buyer can sue the seller. But the buyer will need to be able to prove fraud, which is a pretty high bar to reach. (again, it's best to consult with an attorney on your rights)
When Does the Buyer Receive the Seller Disclosure Statement?
Buyer's often get the Seller's Disclosure Statements from their agent at the time they write an offer. However many agents take a proactive approach and try to get it the buyers as soon as it is available on any property the buyers have a strong interest in. If it's been completed by the seller and is available your agent will be able to download it from the NWMLS. Often the listing agent will also have uploaded other pertinent documents as well – such as preliminary title, legal description, and lead-based paint disclosure if it's an older property.
Hopefully this will shed some light on what to expect when giving or receiving a Seller Disclosure Statement. Just remember it is not definitive of everything that’s going on with the home, but it's a good place to begin.
This article is meant to be viewed as general information for buyers and sellers in the Seattle (and Washington State) area. It is NOT meant as legal advice and any questions regarding Seller Disclosure Statements should be directed to an attorney. I am not a lawyer.