What Do Sellers Have to Tell You When They List a House for Sale?

When sellers list a property for sale, they have certain obligations to buyers. These obligations can vary slightly by state, as different jurisdictions have different rules for seller disclosures.

The main thing, though, is that in most places, the law does want to protect people who are buying a home. And since sellers are in the best position to know the details about the property, they are required to offer certain kinds of information before buyers get a mortgage and move forward with the purchase.

Here are some of the main issues that sellers must disclose, so buyers can have the insight they need before a house changes hands.

1. Structural problems

Structural issues are not always visible to the naked eye. That's why many states mandate that sellers provide information about structural issues when completing their seller disclosures. While sellers do not have to investigate to try to find these issues, they are expected to be honest and forthcoming about any structural defects they are aware of or reasonably should know about.

Some common examples of structural defects that sellers would need to notify buyers about include problems like a major crack in the foundation or issues with load-bearing walls. Essentially, if the core integrity of the home is compromised by a problem, a seller needs to tell potential buyers about the issue.

2. Hazardous substances

Many substances in a home could potentially be dangerous -- and buyers might not know about them. This includes asbestos, lead paint, and mold.

There are both federal and state disclosure laws for certain kinds of hazardous substances that could be found at the property. Sellers who are aware of the presence of these substances need to make sure they tell buyers about them.

3. Any other material defects that can't easily be observed

Beyond these specific types of disclosures, sellers are also required to tell potential buyers about any material defects that can't be readily observed. This means if a buyer can't immediately see a problem and it will have a major impact on the value of the home or the ability to use the home as intended, sellers have to share the issue.

There are many issues that could potentially be considered material defects. Some examples include problems with a septic system or well, a leaky roof, or water rot. A home might have sewage problems, electrical issues, HVAC issues, appliances that do not work, or plumbing problems.

It is generally best for sellers to err on the side of caution and be honest about any problems with the home they're listing. Buyers are likely going to find out about most of the problems that exist when they bring in a home inspector, so trying to hide them is likely to be a failed effort. And even if a seller does successfully manage to pull the wool over a buyer's eyes during the inspection, they could be sued if it turns out they didn't disclose something material.

Rather than wasting the buyer's time or taking a chance on a big legal mess, sellers should just tell buyers what they need to know to make an informed choice about whether the home purchase makes sense for them.