Home Sellers: Are You Disclosing Everything You Should?

Most states require that sellers disclose certain material defects when they sell their homes. As a seller, it’s a good idea if you know what defects your home has before you even put it on the market. That way, nothing will take you by surprise when you have a potential sale.

Certain material defects can substantially affect the price of a home. In fact, some of these defects can even stop a home sale completely. To prevent the frustration that happens when a pending sale is derailed by unexpected discoveries, look into these issues before you even put your home on the market.

A Note on Disclosures

If you’re thinking of selling your home, you may think that having to disclose home defects is a burden for you. But disclosure laws actually protect you as well as the buyer. If there’s a problem with your home that’s discovered after it closes, the buyer could sue you. A disclosure form shows what you know about your home’s condition, and then you’re not liable for future problems if the buyer knows about a problem and goes ahead with the sale anyway.

It is a good idea to have your home inspected before it ever goes on the market. Your home may have issues that you don’t know about. You can then make needed repairs and possibly raise your listing price. And a buyer will have a much harder time renegotiating if they know about defects and submit an offer anyway.

Lead Paint

Lead paint is a huge problem in older homes. Lead wasn’t taken out of paint until 1978 and is a problem in over four million U.S. homes where young children live. The dust from deteriorating lead paint can lead to health problems, particularly in the very young. At the very least, a pre-1978 home likely has leaded paint buried underneath other layers of paint. For this reason, the law requires that you disclose what you know about lead paint in your home.


Asbestos is present in many older building materials, including insulation, siding, and floor tiles made from vinyl. Homeowners don’t need to do anything if the asbestos-containing materials are going to remain undisturbed, but any exposed asbestos needs to be promptly dealt with. It must be primed and painted or totally enclosed. Many states do not require that asbestos be disclosed to buyers, but it’s still a very wise idea to do so.


Radon is a naturally occurring radioactive gas that is often present in soil and water that can get into the air inside a home. In fact, about six million homes in the U.S. have unacceptably high radon levels. There is no state that requires a test for radon levels before a home sale, although many states require that a previous test’s results be disclosed. Some states also require a warning about radon in the contract. It’s a wise idea to have a radon test done before putting your home on the market in order to prevent sale delays. And high radon levels can be taken down to an acceptable level pretty easily. A great resource on radon can be found here.


Mold is a problem that scares buyers away quicker than just about anything else, probably because it is impossible to get rid of it entirely. If there is no visible mold but there is dampness on the walls, ceilings, or floors, then you probably have mold. Although there are no federal regulations for mold disclosure, a professional mold inspection with a signed report is more likely to result in a completed sale.

Polybutylene Pipes

Many houses that were built between 1978 and 1995 used polybutylene piping for the plumbing system. The pipes react with oxidants present in the water, which makes the pipes degrade and then leak. It’s often a difficult problem to uncover, since the pipes deteriorate from the inside. Pipes can actually look just fine but be close to failure (and can then cause substantial home damage). Sellers should be willing to either replace polybutylene pipes before selling or discount the house enough to cover the cost of replacement pipes.

Foundation Cracks

Most buyers are not going to be interested in a house with foundation problems, so look for signs of an issue. Most foundation cracks come from settling, and signs of a problem include a door that no longer closes properly, cracks in the walls above the doorways or where the walls meet the ceiling, and cracks in floor tiles. A structural engineer can tell you if these signs indicate a foundation crack. The longer such a crack is left without being fixed, the more serious the problem will become.

Nice newsletter. Good article. Good information. Thank you. Carol

For conventional financing, borrowers with scores at 740 or anywhere above generally receive the same loan pricing (rate and cost). That being said, the better your credit the higher your chances of receiving loan approval with high debt to income (up to 50%) or high loan to value (up to 95%) which can be a major benefit when applying for a new loan. For Jumbo financing, borrowers with credit scores above 800 are generally rewarded with both better pricing and easier guidelines. There are no situations where better credit is a negative when obtaining new financing so we should all continue to strive to reach and then stay in the 800’s.

What are the advantages of a score over 800

Thank you Mike for this information. As a residential realtor the information that you provide is crucial to a successful transaction for my clients. You are indeed a pleasure to recommend to all of my clients. You are so professional, thorough, conscientious and pleasant to work with. !!

Hi Dane! Wanted to make sure I'm clear on this. Am I right in saying that on whichever remodel is done you still take a loss rather than an increase in value - the ROI will never exceed 100% of cost?