How to Use a Real Estate Disclosure Form

When selling or buying a home with the assistance of a real estate professional, a disclosure form is required to inform the buyer of any mechanical defects the home may have. This form protects both parties in the transaction if used correctly. Even if you’re selling your home by yourself, disclosing its problems in a written format can protect you.

Instructions

Difficulty: Moderately Easy

1. Purchase a packet of real estate forms if you are not using a real estate agent to broker the sale of your home. You can photocopy the one provided or use it as a template and make your own.
2. Sit down when you have plenty of time to fill out the form. If you’ve lived in the house for a number of years, some incidents may have escaped your memory and you must recall them for your form to be accurate.
3. Answer each question honestly but don’t elaborate unless it is to show how you have fixed a problem. For instance, if water leaked into your home when storm winds blew a tree branch through your window, you must indicate that water has entered the home, but explain the circumstances; how you replaced the broken window.
4. Err on the side of caution. When a buyer makes an offer on your home and you are waiting for a closing date, he or she may order an inspection of the property. Alternately, the bank may order it as a contingency of making the loan. If a home inspector finds evidence of termites in your home but you did not disclose that fact; the buyers can walk away from the contract and you must return their earnest money.
5. Add as many extra sheets as you need to explain the reasons for your choices on the form. Unless you make your own disclosure form, most do not give you unlimited writing space to describe your answers. Provide your own and elaborate on each answer you feel the prospective buyer should know about.
6. Sign and date the form and any extra sheets you have. When a buyer makes an offer, he or she will also need to sign and both of you should retain copies of the form.

Tips & Warnings

• It’s better to disclose more rather than less, to protect yourself later on. You can't see within the walls but you must give a good faith disclosure of the defects in your home.
• If you fail to disclose a known defect of your home and the buyer later discovers it, he or she can file a suit against you or your real estate agent.