Buyer Beware: Disclosures in the Home-Buying Process

Buyer Beware: Disclosures in the Home-Buying Process

Buying or selling a home can be fun and rewarding, but also cumbersome. There are expectations to meet and processes to follow, some of which can be confusing. We’re here to help you wade through the experience from start to finish, so you can make informed decisions and stay on solid legal ground at every turn.

You’ve likely heard the phrase “buyer beware,” although may not know exactly what it means.

A Seller’s Duty to Disclose

This might sound pretty scary to a buyer, right? Well, we have good news. While the doctrine of “buyer beware” still applies, the Indiana legislature created a series of statutes several years ago requiring most sellers to provide prospective buyers with a document known as the Seller’s Residential Real Estate Sales Disclosure (“Seller’s Sales Disclosure”) (not to be confused with the Sales Disclosure Form that must be filed with your county when real property is transferred). This disclosure reveals the condition of a property that will most significantly affect value and use, like these items:

  • condition of the foundation
  • mechanical systems
  • roof
  • structure
  • water and sewer system
  • included appliances
  • certain hazardous conditions

The Seller’s Sales Disclosure does not convert the seller’s disclosures into warranties that become part of the transaction. It simply puts honest disclosures about significant features of a purchase on the table from the start. It allows all parties to enter into the normal back-and-forth of the home-buying process with critical information out in the open.

So What Does This Mean For You?

Tips for Buyers:

  1. Ask for a signed, fully completed Seller’s Sales Disclosure before your sign the purchase agreement.
  2. Review the Seller’s Sales Disclosure carefully and ask for any clarifications.
  3. Most importantly, do not rely solely on the Seller’s Sales Disclosure. Always conduct a thorough, independent inspection of the property, ideally with a qualified inspector.
  4. At or immediately before closing, the seller should either disclose any material change in the physical condition of the property to the buyer in writing or certify in writing to the buyer that the condition of the property is substantially the same as it was when the Seller’s Sales Disclosure was provided to the buyer.
  5. Keep a signed copy of the Seller’s Sales Disclosure and the amended disclosure or certification received at or near closing for your records.

Tips for Sellers:

  1. Always complete a Seller’s Sales Disclosure when selling your home.
  2. Be careful and truthful in filling out the Seller’s Sales Disclosure. Otherwise, you may be liable for fraudulent misrepresentation.
  3. Give a signed, dated copy of the Seller’s Sales Disclosure to every prospective purchaser.
  4. Have the buyer sign the Seller’s Sales Disclosure and give you a copy when you sign the purchase agreement.
  5. At or immediately before closing, disclose any material change in the physical condition of the property to the buyer in writing or certify in writing to the buyer that the condition of the property is substantially the same as it was when the Seller’s Sales Disclosure was provided to the buyer.
  6. Keep a signed copy of the Seller’s Sales Disclosure and the amended disclosure or certification provided to the buyer at or near closing for your records.

Are you planning on buying or selling property soon? We’re happy to help. Contact Cecelia Neihouser Harper at 765-637-9175 or cnh@hereforlife.com.

Disclaimer:
The content of this blog is intended to be general and informational in nature. It is advertising material and is not intended to be, nor is it, legal advice to or for any particular person, case, or circumstance. Each situation is different, and you should consult an attorney if you have any questions about your situation.

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