The Importance of Seller Disclosures in Real Estate Transactions

When selling a home, full transparency is essential. Seller disclosures provide potential buyers with critical information about the property's condition, helping to ensure a fair and informed transaction. Understanding what must be disclosed — and why it matters — is key to protecting both buyers and sellers from future disputes or costly surprises.

What Are Seller Disclosures?

Seller disclosures are legal documents that outline any known material defects in a property — issues that may negatively impact its value, safety, or desirability. While requirements vary by state, common disclosures typically include:

• Structural defects (past or present)

• Completed repairs or renovations

• Environmental or natural hazards (flood zones, radon, etc.)

• HOA rules and restrictions

• Land-use limitations or zoning issues

• Missing essential systems or features (e.g., HVAC, water)

• History of property damage

• Known deaths on the property (if required by law)

These disclosures serve two vital purposes:

• For Buyers: They offer a clearer understanding of the property's condition before submitting an offer.

• For Sellers: Honest and accurate disclosures can limit legal liability by documenting known concerns upfront.

In many states, a Seller Disclosure Form or Residential Property Disclosure Statement is required. These standardized forms vary in scope, and your real estate agent will help you complete them in accordance with local laws.

Commonly disclosed items may include:

• Foundation or roofing issues

• Plumbing, electrical, or HVAC problems

• Appliances not functioning properly

• Signs of mold, asbestos, or pest infestations

Some sellers also choose to conduct a pre-listing home inspection to identify and address potential issues before going on the market. This can lead to stronger offers and smoother negotiations.

If there are no known defects, sellers can state this on the disclosure form. However, when in doubt, it's always better to disclose — omitting known defects can lead to legal consequences later.

Timing of Disclosures

Most jurisdictions require seller disclosures to be provided before a buyer enters into a binding contract. In some cases, sellers provide disclosures during showings or open houses to build trust with buyers early on. Your agent will advise you on the optimal timing in your market.

Consequences of Withholding Disclosures

Failure to provide necessary disclosures can lead to:

• Contract cancellation by the buyer

• Lawsuits and legal claims against the seller

• Out-of-pocket costs for repairs, remediation, or damages

Honesty and transparency are the best policies. By disclosing known issues, sellers protect themselves and create a smoother, more confident buying experience.

---

Special Note for North Carolina Buyers and Sellers

North Carolina is a "Buyer Beware" (Caveat Emptor) State.

Unlike some states that require comprehensive seller disclosures, North Carolina law does not obligate a seller to disclose all known property defects. Instead, sellers are only required to answer truthfully if they choose to respond to questions on the Residential Property and Owners' Association Disclosure Statement. A seller may legally respond to some questions with "No Representation" — effectively placing the burden of due diligence on the buyer.

What this means for Buyers:

• You must be proactive. Hire a licensed home inspector and thoroughly investigate the property during your due diligence period.  

• Don't assume silence means "no problems." "No Representation" on the disclosure form does not mean the property is free of defects — it simply means the seller has chosen not to disclose.

• Ask specific questions and work with your buyer's agent to uncover known or suspected issues.  Point out concerns that would be considered a material matter to you as a Buyer. 

What this means for Sellers:

• You are not required to disclose all known defects, but if you choose to disclose, your answers must be truthful.

• Even in a "Buyer Beware" state, intentional misrepresentation or fraud can still lead to legal consequences. Even a mistaken "material misrepresentation" may result in you having to refund a Buyer their Due Diligence Fee, Inspection Fees, and you may even be responsible for proven damages.

• Disclosing known issues — even if not legally required — can reduce the risk of future disputes and demonstrate good faith.

In short:
Buyers in North Carolina must take responsibility for fully inspecting and understanding the property. Sellers benefit from clear and honest communication, even when not strictly required by law.

---

If you are buying or selling a home in North Carolina, partnering with an experienced real estate professional is crucial. Your agent can help you navigate disclosure requirements, due diligence timelines, and risk mitigation strategies to protect your interests every step of the way.

Need help with seller disclosures or buyer due diligence?
Contact your trusted real estate advisor today to get started.