For those considering selling their home without the help of a realtor, it’s crucial to understand the regulations and disclosures required in Maryland. With 65 different property disclosure and disclaimer documents that may apply to your property, depending on its jurisdiction and features, navigating the legal requirements can be overwhelming.
From waterfront properties in Annapolis to bungalows in Frederick, understanding the statewide laws and county-specific regulations is essential for a successful for sale by owner (FSBO) sale. So, don’t get caught off guard! Read on to discover the most critical information you need to know before listing your property.
What is a Disclosure Disclaimer Statement?
As a seller, it is imperative to understand the importance of providing a comprehensive and accurate disclosure of any material defects or features of your property. The Maryland Disclosure Disclaimer form serves as a standard checklist for identifying and disclosing any issues that may negatively impact the home’s value.
By law, sellers must disclose any material defects that they are aware of to the best of their knowledge and understanding. This disclosure aims to promote transparency in the real estate transaction and ensure that buyers are fully informed about the property’s condition. Hence, it’s essential for sellers to fully comply with this legal requirement to ensure a smooth and successful sale. If you fail to include this document in the signed contract of sale, you do not have a legally binding contract and the buyer can walk at any time- even at settlement.Â
Don’t Skip Disclosures
In real estate transactions, seller disclosures serve a vital purpose by ensuring that all parties involved in the transaction have complete and accurate information about the property. These disclosures provide a comprehensive picture of the property’s history, including any known issues, which helps to protect all stakeholders from any future legal liabilities. Additionally, providing disclosures effectively establishes credibility and trust with buyers by promoting honesty, accuracy, and transparency in the sale.
When it comes to completing the disclosure portion of the form, there are several key details that must be included. These include:
- The condition of the water and sewer systems, including any known issues or repairs that have been made.
- Information about the property’s mechanical systems, such as plumbing, electrical, heating, and air conditioning, and their current state.
- Any known hazardous materials or pest infestations on the property.
- Any other material defects that the seller is aware of, including any structural or roofing issues.
- Whether the property is located in a homeowner’s association. If so, what are the rules and regulations of that association?
- Whether the property is in a flood zone or historic district and any potential implications that may have on the property.
Understanding Maryland’s Laws
From the numerous forms to fill out to the intricate language used in the documents, many sellers find the process overwhelming. However, it’s important to note that compliance with these laws is essential to protecting yourself and your buyers in the transaction.
Here are a few of the top legal requirements to help sell your home with confidence:
- In Maryland, sellers are required by law to make disclosures to buyers about the property’s condition through the use of either the Residential Property Disclosure Statement or the Residential Property Disclaimer Statement.
- The seller must disclose any latent material defects of the house to the prospective buyer to the best of their knowledge. This information is required to be filled out in the Disclosure statement.
- Additionally, under Federal Law, sellers of properties built before 1978 must disclose whether or not the property has been coated with lead-based paint. This is required to be filled out in the Lead-based paint disclosure form.
To avoid failing to disclose your property, you may want to consider having a professional determine which documents will be required. Check out our partner brokerage for affordable and professional real estate services.
Common Mistakes to Avoid
Disclosures play a crucial role in the real estate transaction by providing the buyer with a clear understanding of the property. They allow potential buyers to make informed decisions and have confidence in the seller and the deal. As a seller, it is important to understand the importance of providing accurate and comprehensive disclosures in a timely manner.
One of the most significant mistakes a seller can make is failing to provide disclosures at all. This can lead to a lack of trust between the buyer and seller, ultimately resulting in the buyer losing interest in the property. For this reason, it is recommended that sellers complete all disclosure formalities as soon as possible, even if not legally required in your state.
Also, sellers can mark certain points as ‘unknown’ in disclosures. This allows for honest and transparent disclosures while also shifting the responsibility of inspecting that particular issue to the buyer. It is essential to avoid lying on disclosures as it can be considered fraudulent misrepresentation and result in legal repercussions.
Most state laws require that disclosures be provided before closing, and as an FSBO seller, it is your responsibility to provide them promptly, as you do not have a real estate agent to assist in this process. For the ease of the transaction, try to have all disclosures provided prior to a buyer submitting their offer, that way they can sign everything ahead of time, and know exactly what is involved with the property so they will have no questions or surprises moving forward.
If at any point you are unsure what to include versus what is not needed, contact a member of our team today to discuss our disclosure package. It’ll take the stress off of yourself, and give us the responsibility of generating a fully prepared and accurate disclosure package, while still allowing you the freedom of selling your home by yourself every other step of the way.
Here’s How to Minimize Issues
When it comes to selling property FSBO, it’s essential to take the time to review and verify all aspects of the Purchase and Sales Agreement and disclosures.
1. Review & Verify
There is a varying period of time which you are allowed to thoroughly review and confirm all details outlined in your Purchase and Sales Agreement.
2. Ask Questions
Ask questions when in doubt – some phrasing may be confusing or unfamiliar to you. This may end up helping you in avoiding future trouble.
3. Disclose Everything
To avoid potential issues in your home disclosure statement, disclose everything you know about the home. Even a small issue could turn out to be something important.
Disclosures and Disclaimers: Closing Thoughts
When it comes to selling a property, disclosures and disclaimers play a vital role in ensuring a smooth and successful transaction. As an FSBO seller, it is critical to understand the legal requirements and regulations surrounding disclosures and disclaimers, as they serve to provide transparency and protect all parties involved in the transaction.
One key aspect to keep in mind is to always be honest and transparent in your disclosures. It’s essential to disclose any known defects or issues with the property, even if they may seem minor. This not only helps to protect the buyer but also helps to build trust and credibility with the buyer, which in turn can increase the chances of a successful sale.