Have you ever bought a car from a “friend of a friend of a friend” that turned out to be a lemon 4 months later? How did you feel about the guy who sold you the car?
Don’t be that guy.
The Seller’s Property Disclosure is intimidating for some Sellers – and we get it. But the thing about a few sheets of paper is – they don’t bite! And when you take a step back, take a deep breath and realize how easy it is to just state the facts and nothing but the facts on this and other sellers disclosure forms – you’ll see that completing the Seller’s Property Disclosure is just another step in the process of selling your home. Let’s demystify the process a bit – shall we?
On your property disclosure, the state of Colorado requires disclosure on the following items:
The source of water and any related issues must be disclosed. City water or well? Any defects or concerns with a well should be disclosed. No need to guess – if there is an issue and you know about it, state what you know in the simplest terms possible. We’ll talk later about what to do if you kinda sorta think something might be going on.
If your property is part of an HOA or any other Common Interest Community (hint: if you pay dues or follow rules of any type based on an organization in your neighborhood or community, it is a CIC and should be disclosed.) You not only need to indicate that your property is part of an HOA on the Seller's Property Disclosure, but you are required to send all relevant HOA documents to your listing agent prior to going active on the market.
If a new road is planned for a few months after the closing and you know about it (you’ve gotten a letter or other confirmation), disclose it. If you’ve heard unconfirmed rumors about a road or other transportation project in the vicinity, no need to disclose. There might someday be teleportation device straight to Mars in your backyard – but dreaming doesn’t make it so, therefore no need to disclose.
If you or your cousin Bubba have now, or in the past, run a meth lab out of your home… well – you’ve probably got bigger problems than selling the house, but you really ought to come clean about it on the property disclosure. All joking aside, if your home was once the site of a methamphetamine laboratory and has undergone a qualified, complete remediation, you do not have to include this information on the Seller’s Property Disclosure.
Other items covered on the Seller’s Property Disclosure:
If your dishwasher is on the fritz, the Buyer will find out during the Inspection. Just write it down and keep on truckin’.
If you’ve made repairs to the roof, note them. Provide receipts for the work as you are able. Disclosing damage you have repaired is a positive signal to the Buyer that you are on the up and up; they’ll feel good about the transaction and your willingness to be forthcoming.
Heating, Plumbing, Electrical:
Same deal. If you’ve had work done, disclose it. If you know there is a major issue, like the electrical is not to code, or maybe you were informed of the need to replace large portions of the plumbing when you purchased the home, and you never completed the work; bite the bullet and disclose this information. You can’t unknow this kind of information, and ethically you are bound to disclose.
Ah – the nebulous “other” realm of the Seller’s Property Disclosure. This is the spot for everything not specifically outlined elsewhere on the property disclosure. A good rule of thumb here is: If you would want to know about a particular issue regarding a home you were about to purchase, you should consider disclosing the issue. Items here include zoning issues, boundary disputes, insect infestations… Another thing to consider? If you’ve got ants, get rid of them. If you take care of the problem, you won’t have anything to disclose. Don’t defer maintenance if you are selling your home – fix issues you can afford to fix before the listing goes live.
Try not to get too flustered when you reach the notorious "Section M."
What you do NOT have to disclose:
Conjecture, "what ifs," and "maybes" do not belong on the seller’s disclosure form. If you have actual, factual knowledge of a defect or issue with your home, state it clearly and simply on the form. Otherwise, keep calm and carry on. And don’t feel pressured to answer every query on the form. If you do not know about the state of an item on the Seller’s Property Disclosure, check “do not know.” It’s okay not to know.
The Seller’s Property Disclosure covers your home top to bottom, interior and exterior – and it will start to feel a bit tedious by the end. Don’t give up! Answer briefly and honestly and disclose only what you actually know. When you are forthcoming about the state of your home and any existing issues, you can be confident as the deal progresses – and the buyer will be, too.