What do Home Sellers Have to Disclose to Potential Buyers?

What do home sellers have to disclose to potential buyers? Being as honest as possible about persistent problems in the home is the best way to go.

Q: A large bank of windows in our home leak from time to time. We can have very heavy rain or storm systems move through our area and experience no leakage. But a light rain can happen and we detect some leakage.

We’ve spent about $3,000 to have the windows re-caulked, and flashing and cedar siding replaced. Yet, the problem remains and only happens inconsistently.

Does this type of problem need to be disclosed if we decide to sell the home? We’ve had a number of companies evaluate the situation with no permanent remedy. Should we consider selling the home in “as is” condition? Can you provide an explanation of the pros and cons of selling a home “as is?”

Should Home Sellers Disclose Persistent Problems?

A: Water problems in homes can be quite tricky because the cliche “water finds its level” is true. We’ve heard of situations where water comes down from the roof and ends up leaking through a window, or comes in through the sides of a window when the window is not flashed properly, or through the casing of the window when the window is not built right. And, water can come through the sides of a window pane when the caulking and sealing have failed.

Which problem do you have? Who knows, right?

You seem to be trying to resolve the issue logically and have put quite a bit of money into trying to fix the situation. Given the amount of money you’ve put into the issue, without achieving a satisfactory resolution, we’d think that you’ll probably have to disclose the issue to a potential buyer.

Many seller disclosure forms specifically ask you to disclose problems or defects with windows. A buyer won’t be able to see the problem unless the windows happen to be leaking when they walk through the home but you do know of the issue, so that likely means you have to tell the buyer.

Although this will be frustrating to hear, we think that you need to find a solution to your water problem. And, there are some solutions you haven’t tried yet: It’s possible your leakage could be related to wind-driven rain and your windows may be faulty. While you may have caulked the frame of the window and reflashed them, you may have to consider that the actual window construction itself is the problem. (We had this problem ourselves, and spent thousands of dollars running through the same set of solutions over the course of a decade, only to discover the window itself was faulty and needed to be replaced.)

Once you rule out the windows themselves, consider using an infrared sensor and a moisture meter when the windows leak to see if you can pinpoint the source of the water.

We know that home inspectors use infrared cameras and moisture meters and frequently catch problems in homes that way, and it occurred to us that this could be something worthwhile for you. Talk to some professionals and see if they have additional ideas.

On the issue of selling your home “as-is” condition, you should know that selling a home as-is does not eliminate your need to disclose defects in your home in states that require seller disclosure to a buyer. When you sell a home “as-is” you put the buyer on notice that you are not making any representations as to the condition of the home, other than as required by law. But what most people take from an as-is sale is that the home has or may have serious problems and that the buyer needs to investigate these problems. Once closed, the buyer is on their on when it comes to any issues that come up with the home.

That might help you sell, but you’ll pay the price in the form of what you can get for your home. Homes that are sold “as-is” generally will sell for less than other homes. Sometimes selling “as-is” scares off potential buyers, so it might take you a lot longer to sell.

If you truly can’t fix the problem, you should disclose the problem to the buyer and then make sure your contract also states that you have disclosed this problem and you should disavow any obligation to repair any issues related to the windows that have the problem. You might still scare off some buyers but at least they shouldn’t be able to come back and sue you for not disclosing the issue to them.

However, given the problem, we will assume that buyers will make a bigger deal of the window issue and may discount the price of the home substantially for the problem. You could get lucky and find a buyer who believes they have a solution or occasional leakage doesn’t bother them, but most buyers (and their home inspectors) will see the issue as a big problem and will ding you on the price.

Better to solve the problem. We’re hoping you can before you list the home for sale.

Does Seller Disclosure Cover Plumbing Problems?

Seller Disclosure Form – Was Your Seller Truthful?