How can home buyers use sellers disclosure reports

What is a seller’s disclosure report and how can a buyer use this?

Many states have enacted laws that require the seller to disclose serious or material defects in the property he or she wants to sell. The buyer should not totally rely on this legally-required document to tell him or her the condition of the house. It is extremely important that a buyer have his or her own inspection done on the house by a licensed inspector.

The states that require a seller’s disclosure have enacted laws that make the seller liable for deliberately submitting a false disclosure report. However, the requirement here is only that the seller acknowledge any defect that he or she is aware of. The seller is not required to do any investigation beyond what a reasonable person would do. Even if the seller lists some item as having a major defect, there is no requirement that the defect be fixed, just that it is acknowledged.

The potential buyer should scrutinize the seller’s disclosure document, if one is required in that state. Pay attention to the length of time the seller has occupied the property, if ever. Under the law a seller could legally say that he or she had no knowledge of a material defect because the seller never lived on the property. Many homes are sold by people who never lived in the house, so these disclosure documents can be misleading.

I understand that zillow.com can help me find out the true value of a house. Is this true?

Yes and no. Zillow offers free online home valuation service for any property in the country. You enter the address and it provides an aerial view of the property with a dollar value of the property. Zillow is as good as the information it relies on, and sometimes that information does not tell the full picture of a home’s value. For example, if you have refinanced for an amount that is lower than the property’s market value, Zillow shows the refinanced amount because that is the information publicly available.

What you can get from Zillow is a ballpark value of a particular home and homes in the neighborhood. It also shows homes (designated by flags) that have recently sold plus the sales amount, and homes up for sale. While the site is not perfect yet, it is worth consulting when looking to buy a home.

What are comparables and how can I use them?

Comparables is a real estate term for houses that are located close together, with similar features, that are put up for sale or sold in a close time period. When you are looking to buy a home, your real estate professional will show you similar houses in that area that have sold for a certain amount, which helps you decide what the going price is for that type of home in that neighborhood. By using products such as Zillow you can approximate the same thing. Using the aerial view of a particular property, Zillow flags close properties and the sales price.

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