The real estate industry is always in a constant state of change. Fortunately, there are some aspects of the industry that rarely change, but have a much higher impact.
The disclosure requirements for selling real estate is vital to ensuring both parties are protected against false claims and liability suits. As a seller, you’re expected to disclose information about your home. Besides the new roof, or the recent upgrade to your downstairs bathroom, buyers also want to know about the issues requiring immediate attention.
The list of what is required to disclose varies by state. We suggest you include items that cause the biggest concerns, like lead-based paint, termites or infestations, and toxic materials in the home.
All of these should be included in a written form and signed by both parties. It is recommended to maintain a copy for a least three years.
The requirement is to reveal known issues, therefore; you don’t necessarily have to get a home inspection unless you want to be proactive. There is always the chance that something major needs to be addressed before putting the home on the market. A good local agent can advise you based on your concerns and the current condition of your home.
Missouri Real Estate Seller Disclosure Requirements
Missouri is one of the states that don’t have a long list of items you must disclose to the buyer, however, we’d recommend going above the required list to establish proper expectations. The most explicit Missouri statute is § 442.606. This requires home sellers to reveal if the site was used for the production of methamphetamine in writing.
Methamphetamine, also known as crystal, meth, or ice is an illegal and dangerous stimulant drug sometimes manufactured in homes. The disclosure of the criminal history is only required if you had personal knowledge of meth production. You are not required to search police records to learn if the home was ever used to produce the drug.
It is also required in the Show Me State to disclose whether the property was the site of the endangerment of a child through physical injury. This Missouri statute is only required if you had prior knowledge. For example, if you knew the prior owner or tenant was convicted of abusing a minor child there, you’re required to include it in the disclosures.
Beyond these requirements, sellers in Missouri will typically include a caveat emptor clause in the purchasing contract. The phrase is Latin for “let the buyer beware,” and basically means the buyer is purchasing the home at their own risk.
If a defect is discovered after the purchase of the home, judges refuse to award compensation under the caveat emptor doctrine. Unless the seller deliberately did something to prevent the buyer from inspecting the property, or lied directly to the buyer about the home’s condition. But you should also consider the time and legal fees a lawsuit would cost, therefore, it's better to err on the side of revealing too much information rather than the minimum requirements.
The Benefits & Risks of the Real Estate Disclosure Requirements
The benefits to disclosing the details required by the state statute far outweigh any of the risks. Providing more than the required information helps to reveal the condition of the home and may help to smooth negotiations after you’ve received an offer and the home is in escrow.
The buyer will appreciate the fact that you’re being honest and upfront about the property and will have less reason to react if something is discovered during the inspection. The disclosures also prevents the buyer from later claiming that she or he didn’t know about a particular defect.
Of course, as a seller, your goal is to sell your home as quickly as possible and for the most profit. So the temptation is to avoid sharing too much information and to expedite the process. There is no such thing as a home without some type of defect, let’s say after the purchase the buyer discovers an issue like a busted HVAC system. He’s not only angry with you, he now has a costly repair and may decide to sue for breach of contract. Although you may win the case, your reputation is ruined.
With the help of a top-rated agent, you can decide what do disclose and what could be a potential red flag if you don’t. The added value of an experienced agent will put your mind at ease so you can focus on other important matters.
Contact us today and we’ll help get your disclosure questions answered.