As a homeowner in Texas, you may decide to sell your property. Selling a home you have owned for a long time is a great opportunity to take advantage of having a long-term investment. Many people profit from selling because they spend years building equity and raising the property value.
Selling a house in Texas can be challenging. To entice potential buyers, the home must undergo extensive preparation, including hiring a real estate agent, cleaning and decluttering, staging, negotiating offers, making repairs, and navigating all the paperwork.
Many sellers forget about the required disclosure notice. This article will discuss the purpose of this document and why it is important in real estate transactions.
What is a Seller’s Disclosure Notice?
Texas property code requires sellers to complete a disclosure notice before each sale. This legally required form allows sellers to disclose information about material defects or conditions affecting the property to buyers.
A disclosure form ensures the sale is transparent so the buyer isn’t ripped off when they suddenly discover a major defect after moving in. If the buyers know about the potential issues ahead of time, they can make more informed decisions.
The form can easily be downloaded online. It includes questions such as whether the property has:
- Natural gas
- Working smoke detectors
- Aluminum wiring
- Infestations, such as termite infestations
- Appliances
- A satellite
- Copper piping
This disclosure includes questions about whether foundation damage is not caused by natural causes or disasters, such as a flood. Sellers are obligated to inform buyers about specific types of damage. A copy of a suitable disclosure notice is available here. Always double-check with your real estate agent to ensure you have an up-to-date disclosure notice.
Legal Requirements in Texas
According to the Texas Property Code section 5.008, sellers are legally required to provide a disclosure notice to buyers before the sale contract goes into effect. The disclosure must include information regarding structural defects, plumbing, electrical system information, environmental hazards, past accidents, and other relevant information.
Sellers are obligated to disclose anything about the real estate property that might impact the buyer’s opinion or the property’s value, even if it’s not specifically listed on the disclosure. For example, if there is a cracked stone counter, this might not be asked on the disclosure. However, sellers are still obligated to tell buyers before they purchase the property.
According to Texas Law, the real estate disclosure must be given to the buyer before they sign a contract regarding the sale. It can be delivered in person, emailed, or mailed. The buyer must present a signed copy to the seller before signing a real estate sale contract.
What Must Be Disclosed
The seller’s disclosure form will contain much information about the property. Most of the information is related to the physical condition of the property and any recent renovations. Here is a more detailed look at what information may be found in a seller’s disclosure form.
Property Condition
The property’s condition plays a vital role in selling real property. Buyers want to purchase the home for a fair price and do not want to wind up with a home with severe issues they don’t know about. For example, they may develop related illnesses if they don’t know a house has toxic materials, such as asbestos.
Structural issues will be a primary focus of the disclosure form. Based on the seller’s knowledge of the property, all concerns about structural elements like the foundation, walls, framing, roof, ceilings, or other building components must be disclosed.
Several other aspects of the property must be included, such as the condition of the HVAC system, water damage, mold infestations, the electrical system, and more. A disclosure must include information about environmental hazards, such as lead paint.
Other Disclosures
In addition to the physical condition of the property, several other elements are found in most seller’s disclosure forms. The seller should describe previous repairs or renovations in detail. This includes additions, such as adding a room to the home.
The seller must include if the property is in a homeowners association. In certain circumstances, the buyer has a right to know if someone died on the property. Finally, the seller must disclose if there are neighborhood nuisances or disputes.
What Doesn’t Need to Be Disclosed
Certain information is not required to be included in a written notice by the Texas Real Estate Commission. For example, if property conditions are unknown to the seller, they cannot be held liable for not disclosing them before the transaction.
Repairs or renovations made by a previous occupant do not have to be included. If a death on the property was unrelated to its condition, it does not need to be shared. For example, deaths caused by suicide, natural causes, or an accident unrelated to the property’s condition.
Some stigmatized property issues, which are psychological or traumatic events that have occurred on the property, may not need to be disclosed either. For example, if a house is stigmatized because a murder happened in the house, sellers may not need to disclose that.
Consequences of Non-Disclosure
When signing a purchase contract with a buyer, honesty is always the best policy. Some sellers may attempt to hide property defects from the buyers to get a better offer, but this could result in legal issues for the seller. Here are some consequences of non-disclosure.
Legal Liability for Sellers
You could face legal liability if you sign a purchase contract without disclosing all material facts. The buyer could file a lawsuit against you for a breach of contract, fraud, or misrepresentation. You may have to pay a fine for these offenses, and if the buyer sues you for legal damages, you may owe them more. Buyers may get a court order to make repairs, too.
Buyer’s Remedies
Most buyers can confidently buy properties since the Lone Star State requires a disclosure for each sale. However, if they discover undisclosed defects after the purchase, there are a few solutions for Texas buyers.
First, the buyer can terminate the contract, even at this late stage, citing a breach of contract by the seller. They could also seek financial compensation to cover the cost of the needed repairs. Lastly, the buyer could pursue legal action against the seller to recover legal damages.
The Importance of Honesty and Accuracy
Every transaction requires trust from the seller and buyer. The seller expects the buyer to pay a fair amount, while the buyer expects to receive what they are told they are purchasing. Sellers have a certain level of responsibility regarding real estate transactions, such as telling a buyer about specific aspects of the house.
Seller’s Responsibility
The seller’s responsibility to disclose information about the property to the best of their knowledge is an ethical and legal obligation. A disclosure is required to sell Texas real estate, but if you withhold information from the buyer, you are doing them a disservice.
Not only is this unethical, it is also illegal. Intentional non-compliance is considered fraud. That’s why there are so many possibilities regarding consequences for non-compliance.
Protecting Yourself as a Seller
Honesty and accuracy are the best approach to avoid legal issues when selling a home in Texas. Be thorough when evaluating the property, and complete the disclosure form honestly.
Whether the house has lead-based paint, termite infestations, recent repairs, or an impending foreclosure sale due to bankruptcy, make sure the buyer knows before purchasing the property.
Selling to a Cash Home Buyer
Selling a home to traditional buyers can be stressful, especially if it has many defects. Most buyers want a house in good condition for a fair price, so if there are several necessary repairs, they will either ask to have them addressed before the sale or significantly lower their offer. You can overcome this issue by selling real estate property to a cash buyer.
Simplified Disclosure Process
Cash buyers can implement an expedited sales process. In many cases, these investment companies purchase properties in any condition. This means avoiding spending time and money on repairs before the sale.
Additionally, experienced investors understand the risks of buying properties with long lists of defects. The purchasing process is much faster since they have funding to complete necessary repairs.
A Solution for Distressed Properties
If you own a distressed property with issues like termite damage, lead-based paint, deteriorating HVAC systems, or structural issues, you can still sell your home to a cash buyer.
You won’t have to worry about the seller’s disclosure notice disrupting the sale, nor will you need to spend much effort preparing the property for the sale. If finding a traditional buyer is challenging, find a local cash buyer who will take your property as is.
Contact a Cash Home Buyer Now!
A-List Properties is a Texas cash house buyer with vast experience purchasing distressed properties. Our fast process ensures we can close the deal in 14 days or less once you accept our all-cash offer. Our team also values honesty, so we will be upfront about the best way to sell your home, even if that means recommending a traditional sale with a real estate agent.
Call us today at 972-526-7042 or complete the online form to request a no-obligation cash offer on your property.
Zach Shelley
Zach Shelley is a seasoned real estate investor with a diverse network spanning across the nation. As the founder of his own real estate venture, Zach is committed to offering innovative solutions to homeowners facing various real estate challenges.. Through his dedication and strategic approach, Zach continues to make a significant impact in the real estate industry, providing homeowners with alternative pathways to navigate their property transactions.
