Sellers Disclosure, What are they? Why do we need them?

A Seller's Disclosure is like your medical history but for a home. It's a long list of all the major components of your home like roof, foundation, well, septic tanks, heating, plumbing, and a lot more. Each of these major components on the form asks you if you have any issues or repairs. Most homes in Iowa that are being sold are required to fill out a Seller Disclosure to the best of their knowledge. The reason they do this is to show transparency, based on their knowledge if there are any major faults with the property. 

When it comes to the Seller's Disclosure the first step is to read through it carefully. You should do this no matter what side of the transaction you are on. If you are a Seller, you want to make sure that you understand each question and answer each question to the best of your knowledge. If you are looking to purchase the property, looking at this disclosure can help you weed out some homes that don't fit your needs. Let's say that you have twenty homes that you want to look at, but you also want no foundation or roof issues due to the expense and/or list price of the home. This disclosure would eliminate some of those homes, bringing your new amount to maybe ten. This document saves time on both sides of the transaction. When reading through it, if as a Seller, you don't understand a section, please ask your Realtor for an explanation of the question before writing down whatever you think is right or assume you know. We are here to help, you so ask questions! 

While you are reading through this document you are also answering the questions it asks you, for example:  “Roof: Any known problems, repairs, or replacement? … ???? Yes, ???? No, or ???? Unknown, If yes please explain _______. “ There are about sixteen different questions exactly like this, but in different areas of your home. If you answer yes to any of these questions, you need to further explain why you answered yes. It can either make your home stronger or weaker depending on the reason you said yes. For example, if you said yes because you recently replaced your roof in 2023, that is a major strength of your home. If you said yes because you have a leaky roof that creates a nice water feature every time it rains, this will weaken your home’s position. Each of these questions is important and can either strengthen or weaken or not affect your home sale at all. Make sure to read carefully and understand each question. 

Some properties in the State of Iowa are required to fill out the Seller Disclosure form, while others are exempt from filling out this form. The exempt properties are bare ground lots, five or more dwelling units, court-ordered transfers, Power of Attorney transfers, foreclosures, fiduciaries of an estate, and trusts. Each of these properties has one thing in common: there is no longer an owner living there who knows enough information about the property to fill out the Seller's Disclosure form. You wouldn't want the fiduciaries of an estate who have never seen or lived in the property to fill out the Seller's Disclosure and answer questions wrong. They do still have to check the exempt box and sign their name at the bottom of the form to be on the right side of Iowa law. 

In the State of Iowa, you legally need to disclose any material fact about the property. That could be damage from a hail storm on your roof or foundation settling in the southeast corner of your home or melted siding from having your grill too close to the home. Sometimes the homeowner doesn't know some of these material facts until the home has been inspected and that is okay. You won't get in trouble for not knowing that there was a fault you couldn’t see. You don't legally need to disclose the fact that you have a ghost that has been haunting your home for the last fifty years. You also don't legally need to disclose that there has been a crime committed in your home, but some people prefer to be transparent about things like that. 

In conclusion, Seller Disclosure is a very useful document that can help the transaction process on both sides if you're a Seller or Buyer. The form is mostly used in the touring and offering part of the transaction. They cover everything major in your home and can strengthen or weaken your home’s position. There are exempt properties in Iowa that do not require the form to be filled because the person selling or representing the Seller does not know enough information about the property. You have to disclose any material fact and don't have to disclose any supernatural facts or events that have happened in your residence. Now that you know what a Seller's Disclosure is and why it's required for a Real Estate transaction hopefully filling out this form will be a breeze.