Understanding Seller Disclosures: Legal Requirements Explained
September 15, 2025
6 minutes
What if you bought your dream home - only to discover leaky plumbing, pest damage, or past flood issues the seller never mentioned? That’s exactly why seller disclosures exist.
Whether you're buying your first home or listing your fifth investment property, understanding seller disclosure requirements is crucial for avoiding surprises and protecting your legal rights.
Let’s break it down step-by-step - in plain language.
What Are Seller Disclosures?
A seller disclosure is a legal document that the property seller must complete to inform the buyer about known issues or defects with the home.
Think of it as a "truth-telling checklist" - designed to:
- Protect the buyer from hidden problems
- Protect the seller from future lawsuits
- Promote trust and transparency in the real estate process
Common Disclosures Include:
- Water damage or mold
- Roof repairs
- Pest infestations
- Foundation issues
- Plumbing or electrical problems
- Environmental hazards (like radon or lead paint)
Pro Tip: Seller disclosures vary by state. Some states (like California) require more detailed forms, while others are more lenient. Check with your real estate agent or attorney for local laws.
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Why Seller Disclosures Matter for Buyers and Sellers
For Buyers:
- Helps assess the true condition of the property
- Influences your offer price
- Allows you to budget for future repairs
- May impact your mortgage approval or insurance quote
For Sellers:
- Shields you from legal liability down the road
- Encourages a faster closing by reducing surprises
- Builds trust with serious buyers
Example: Imagine selling a home with a history of basement flooding. If you fail to disclose it, and the buyer finds out after closing, you could be sued for damages - even if it’s months later.
How Disclosures Compare Across States
State | Disclosure Rule | Buyer Protection Level |
|---|---|---|
| California | Mandatory disclosure form (TDS) | Very High |
| Texas | Standard property condition form | High |
| New York | Disclosure OR $500 credit option | Medium |
| Alabama | “Caveat emptor” (buyer beware) | Low |
Related: Real Estate Disclosure Rules by State – NAR Guide
What Must Be Disclosed?
Here’s a list of the most common required disclosures:
Structural Issues
- Cracks in foundation, ceilings, or walls
- Roof age and leaks
- Termite or pest damage
Mechanical Systems
- HVAC system age
- Broken appliances
- Outdated electrical panels
Water and Mold
- Past flooding
- Ongoing leaks
- Presence of mold (even if treated)
Legal and Zoning Issues
- Property line disputes
- Unpermitted additions or renovations
- HOA violations or liens
Environmental Hazards
- Lead-based paint (if home built before 1978)
- Asbestos insulation
- Nearby industrial or toxic sites
Note: If you’re unsure, it’s safer to disclose than to withhold. Courts often favor transparency.
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When and How Do Sellers Fill Out Disclosures?
Usually, sellers complete a disclosure form when listing their home or upon receiving an offer.
The Process:
- Seller receives a disclosure form from their agent.
- They complete it honestly and thoroughly.
- The buyer reviews the form before closing.
- If needed, the buyer can negotiate repairs or credits.
Tip for Buyers: Always read the disclosures carefully before finalizing your offer. If something feels off, get a second inspection.
What Happens If a Seller Doesn’t Disclose?
Failure to disclose known defects can result in:
- Delayed closings
- Contract cancellations
- Lawsuits for fraud or misrepresentation
- Court-ordered compensation (for repairs or lost value)
Real Example: A homeowner in Ohio failed to disclose past termite damage. The buyer sued after discovering structural rot - and won $22,000 in court.
How to Protect Yourself as a Buyer
- Review all seller disclosures thoroughly
- Get a professional home inspection
- Cross-reference disclosures with your title report
- Ask for repair records or warranties
- Contact an attorney if you see red flags
Resource: reAlpha Home Inspection Checklist
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Disclosures from reAlpha
- reAlpha Mortgage is a licensed mortgage lender (NMLS #1743790).
- Bundled rebates vary by state and service usage.
- This content is for educational purposes only and not legal advice.
- Always consult a qualified real estate attorney for state-specific guidance.
FAQs: Seller Disclosures
1. Are seller disclosures required in all states?
No. While most states require some form of disclosure, others follow a “buyer beware” rule (like Alabama).
2. Can a buyer cancel the sale over a bad disclosure?
Yes, especially if the issue wasn’t disclosed upfront or is considered material to the home’s value or safety.
3. Do I need to disclose repairs I’ve already fixed?
Yes. Even fixed problems (like roof leaks or mold) must be disclosed if they were serious or recurring.
4. What if I truly didn’t know about a problem?
You’re only liable for what you knew or should have known. But that line can be blurry - it’s safer to be transparent.
5. Can reAlpha help with navigating disclosures?
Absolutely. Our agents are trained to help you understand disclosures and work with inspectors to protect your interests.
Final Thoughts: Transparency Is the Smartest Policy
Whether you're buying or selling, clear and complete seller disclosures protect everyone involved. They foster trust, avoid disputes, and ensure smooth closings.
With tools from reAlpha and bundled services from reAlpha Mortgage, you can shop smart, save thousands, and avoid costly surprises.
Next Step:
Visit reAlpha.com to explore savings, download tools, or speak with an agent today.
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Article by
As a great communicator with excellent negotiation skills, I focus more on establishing unbreakable ties between my clients, as opposed to just helping them achieve their real estate dreams. As a representative of both buyers and sellers, I understand how to lead a transaction process to ensure that the needs of both are met. My track record speaks for itself. Since I ventured into the industry in 2013 as a realtor, I have not only helped many buyers land perfect homes, but I have also assisted tons of owners and investors build wealth.