January 17, 2013

Importance of Hazard Disclosures When You Plan to Sell a Property

The greatest concern of any property buyer, particularly when buying a property that was constructed long back, is the indications of wear and tear, deterioration, and other possible defects. The seller should thus take steps to clear the buyer’s concerns so as to sell the property in a short period of time. This can be assured to the buyer by offering a detailed hazard disclosure report.

Who Prepares Such Reports?

Real estate disclosure report for possible hazards is prepared by the property owner for the buyer by listing the defects in a proper manner. Such disclosures are beyond an honest gesture that you can opt to buy or refuse. The real estate regulations of several developed countries have made it compulsory for the sellers to reveal all kinds of defects and faults.

Issues with Practical Implementation

Although, practically such laws can be really difficult to implement, mostly because there are no specific guidelines as to the type of defects that can be revealed. For instance, few laws indicate that the seller must reveal all identified issues, which can be difficult at times to determine as to what is categorized under such a definition and what is not.

Country-Specific Laws

In many countries, issuing a hazard disclosure report is very important since transparency can be maintained with the buyer this way. The owner of the property reveals all the problems he is familiar within the specific property and the buyer also can look at the listing, thus assisting to make  decision on whether to go ahead with buying the property or not. This way, the seller can also sell the property quicker. So, it is important that sellers issue hazard disclosure report.

The difference in these regulations is seen mostly in United States, as there is no federal mandate to regulate this process throughout the country. While on one hand, most of the states continue to work without any regulation about hazard disclosure, on the other, states like Hawaii, Alaska, Florida, and Idaho have come up with their own set of laws to tackle the issue due to natural hazards in respective geographical locations.

Honesty is the Best Policy!

Irrespective of the rules and regulations, it is important for the seller to be honest when disclosing the possible hazards. It would be better to reveal the defect before settling on a comparatively less price than dishonestly selling it for a higher price and moving through lawful proceedings instigated by the buyer after he finds a major problem that was not indicated in the disclosure. On the other hand, if the buyer finds out the defects before completing the deal, the seller has to give back all the payments made by the buyer or in worst cases, he may also have to bear the legal expenditures. This is the reason it is important that the seller has to know completely about the local laws associated with real estate disclosures. The disclosure is compulsory if there are health risks at the property.

General Defects to be Listed Out in Standard Disclosure Report

Few of the general defects that a standard disclosure report should reveal are problems like plumbing problem, electrical system issues and water leakages. There are several disclosure forms available online for real estate transactions. As a general law, all problems should be stated in a precise and clear way in addition to the steps taken by the seller so far, and the probable fixes too.

George Sandlin is a real estate analyst, and he has studies the effects of natural hazards on various real estate markets in United States over the past 7 years. He strongly recommends the buyers to be totally transparent while selling a property to avoid any kind of legal action at a later stage.

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