If you’re selling a home in New Mexico, you have to disclose all the defects in your home before the sale. From material defects to malfunctioning systems, everything has to be reported. In this article, we take a look at what needs to be filled in a disclosure form and how to do it.
If you’re selling a home in New Mexico, by law, you are required to disclose a few important details of your home. The New Mexico Real Estate Disclosure Act requires you to report any important defects in your home to your buyer.
In the real world, you do this by filling a form or by writing a statement. The statement provides essential information about your property. Typically, seller disclosure forms require you to indicate if the house has any material defects that could affect its value.
Even before we get into the details of what exactly has to be disclosed, it’s very important to understand that lying on this form can be an absolute disaster. The buyer can sue you for fraud.
You’ll have to pay damage compensation to the buyer. On top of that, you’ll also have to spend a lot on attorneys and court costs. So, irrespective of what the problem is, just state the truth.
Filling the Form
Finding a disclosure form for New Mexico properties is fairly simple. You’ll find plenty online. However, there are a few points to note.
The signature and date boxes are important. You have to sign a disclosure form before you sign the purchase agreement. Also, make sure that you get an acknowledgment from the buyer.
The form has a box for the buyer to sign and indicate the date. Make sure that you get the signature and the date before you sign the purchase agreement. In New Mexico — and a lot of other states — the onus of getting this done is on the seller, and not on the buyer.
Filling the form itself is fairly simple. The forms are standardized and you just need to fill in the details.
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So, What exactly are you supposed to disclose?
Disclosing details is a straightforward task if you have a form. These forms usually have a "Yes, No, or Unknown" format. Just tick the right answers.
However, you also have to voluntarily mention if something is wrong. So, let’s see what you have to look for.
Firstly, there’s no need for a home inspector here. You have to disclose material defects and all the major ones are covered in the forms. However, just walk around your home and see if you can spot anything.
Leaking floors, mold, cracked walls — things like that. It’s important to understand that it’s not your responsibility to look for hidden issues. That’s an inspector’s job.
The more practical thing to do here is to fix small issues. If you see a few broken windows, fix them. Because it’s an easily noticeable defect, you have to mention it on the disclosure form and doing that will bring the value of your home down.
Instead, just fix it. This way, you are increasing the value of your home. This is also true for other things like simple plumbing issues, broken door knobs, etc..
That being said, if you’ve been living away from your home for a long time, a thorough inspection is crucial. You can even hire professional help if you think it’s required.
The seller disclosure form also requires you to provide information on the systems installed in your house, any visible material defects, and any unpermitted additions or work.
The Federal Seller Disclosure Statement
When selling your home in New Mexico, you are required to comply with both State and Federal government regulations.
For instance, if your house was built before 1978, you will need to abide by the Residential Lead-Based Paint Hazard Reduction Act of 1992, which is also referred to as Title X. The law demands that you must
- Disclose all known lead-based paint and hazards in your property
- Provide the buyer with a pamphlet that is prepared by the United States Protection Agency (EPA). This booklet is called "Protect Your Family from Lead in Your Home".
- Provide signed warning statements and get a signature from the buyer for the same. You are also required to keep the signed acknowledgment documents for at least three months.
- You have to give the buyer a 10-day time-frame to test and verify the house lead.
If these regulations are violated, you can be sued. "Three times damage and repairs" is the usual fine for this.
How to Avoid Troubles
When you’re filling in your seller disclosure form, remember that you have to adhere to two separate laws, the New Mexico Real Estate Disclosure Act and the Federal law.
One thing that will help you fill these forms is understanding that the idea here is to note problems that you can see with your naked eye. It’s also important to mention system troubles or malfunctions.
So, if the A/C isn’t working, it has to go on the disclosure form. However, you don’t have to check for problems in the foundation. Leave it to the inspector.
One thing that you can do to make life easier is hire an experienced local real estate agent. Real estate agents will fill the disclosure form for you and they know exactly what to report.
Real estate agents do this day in and day out for multiple properties. You can rely on them to get it right. Finally, if there’s one thing that you have to do, it’s to check that everything that goes on the disclosure form is true.
False statements on a disclosure form is a sure way to invite trouble.
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