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Real Estate 101: Seller’s Property Disclosure Statement

Seller's Property Disclosure Statement

The seller’s property disclosure statement is a valuable source of information about the condition of a home. While the seller is legally required to disclose all problems with the property, some choose to include ambiguous or incomplete information to make the sale a little easier. The wary buyer should be on the lookout for this tactic and read the disclosure statement with a very critical eye. Here is a quick rundown on the most important things to look for and why:

The roof

The age of the roof should be disclosed but simply knowing the age doesn’t tell very much. Instead, the buyer also needs to know the type and quality of roofing materials used. The most common – composition shingle roofs – are quite durable and can last 20-30 years. Clay roofs seen on Mediterranean-and Spanish style homes can last over 50 years. Tar-and-gravel roofs are the least durable and can last as little as 10 years. Additionally, the firmness of the substructure of the roof should be determined by having your home inspector “walk the roof.”

Crawl space or cement slab

Either of these types of foundation can hide significant problems and should be carefully examined by your inspector especially if any mold growth is disclosed. A crawl space should have proper ventilation, remain relatively dry and be adequately sealed to avoid any animal infestation. Also, if you don’t see a termite guarantee, you may ask the seller to include one. A cement slab avoids the above problems but comes with some of its own. The buyer needs to know whether the slab has ever been repaired and for what reason. For instance, a nearby tree may have caused the slab to buckle and will do so again if not removed. A cement slab also makes it difficult – and expensive! – to repair underground sewage and water pipes.

Cracks in the wall

Evident cracks in an interior wall are not merely a cosmetic problem, In fact, they can indicate trouble with the foundation and a potentially expensive repair. The seller should disclose any and all of these “minor” problems. Similarly, a crack in the exterior stucco or brick facade of a home is cause for major concern. If any of these problems are included in the disclosure statement, a buyer should consider bringing in a structural engineer to inspect the problem and recommend a solution.

Plumbing and pipes

As noted above, replacing or repairing a plumbing system – even if it is not located underneath a cement slab – can be a major expense. The type and age of the plumbing system should be disclosed. The best systems are constructed with brass, copper, galvanized steel or a combination of all three and can last 80 to 100 years. The worst systems are constructed of polybutylene plastic – they deteriorate and the material hasn’t been used extensively since the mid-1990s – or lead pipes – they can cause the water in them to be poisonous – and must be replaced.

The HVAC system and water heater

The property disclosure statement should itemize the age and dates of installation for each of these items. Gas water heaters typically last 10 years.  Electric water heaters might last 15 years out of an electric before they start to leak or fail completely. If the disclosure statement indicates the items are nearing the end of their useful lives, be aware that you will probably be replacing them in the near future. Properly maintained furnaces typically last 20 years or more. Exposed to the elements, outdoor HVAC systems may last 15-20 years but even 10-year-old ones are far less efficient – as much as 40% – than current models. In other words, in the long run, it may be cheaper to replace them.

Miscellaneous property disclosure statement info

A lot of miscellaneous information gets included in this section of the disclosure document. Along with the general condition of the items listed above, the State of Minnesota also requires the seller to make certain disclosures including:

  • Subsurface sewage treatment
  • Private well disclosure
  • Methamphetamine production disclosure
  • Radon disclosure
  • Water intrusion and mold growth disclosure
  • Any easements or building restrictions discolsures

The seller’s property disclosure statement is just the first step that a buyer should take before buying a home. In addition, they should pay close attention – best done by using a home buyer’s checklist – to anything that seems out of the ordinary when they tour the home and ask the about the issue specifically.

If you have any further questions or would like to download the standard seller’s property disclosure statement for the State of Minnesota, please contact us online or you can reach us directly at 612-298-1900.