To ensure transparency in the process, almost every state has implemented some kind of disclosure form. Some states have a brief form for sellers to fill out, while others have a more exhaustive checklist.
The form used here in Hawaii is entitled “Seller’s Real Property Disclosure Statement” and is endorsed by the Hawai’i Association of Realtors. It covers items that are typical to any home but has also been customized to address situations that may be more common in Big Island homes for sale.
What is a Seller’s Disclosure?
The seller’s disclosure used in Hawaii is a document that lists known facts, defects, or conditions, past or present, that may impact the value of the property. The seller is required by law to disclose to potential buyers any “material facts” in the home and/or on the property so the buyer can make an informed decision about purchasing the property. The seller’s disclosure form is intended to assist the Seller in organizing and presenting all material facts concerning the Property.
What are “Material Facts”?
Sellers selling their Big Island property should always disclose any “material facts.” The disclosure form defines this as “any fact, defect, or condition, past or present, that would be expected to measurably affect the value to a reasonable person being offered for sale.”
Sellers may not know of some problems affecting the property, so buyers should still get a professional inspection. Sellers should be disclosing everything they know about the property based on their time within the home and anything they have knowledge of that happened before they moved there.
Tips for Sellers
Take your time and think about each question. When in doubt, disclose, disclose, disclose! It’s always better to let buyers know about things ahead of time rather than wait till you’re in escrow. If a buyer asks for an amended seller’s disclosure, this will extend the contingency period.
On the last page of the disclosure, called section “G” there is a very small area to explain anything you said “yes” to in the disclosure, such as repairs, additions, encroachments, lawsuits, and more. The seller can add additional pages for an explanation as well. My best advice to any seller filling out the form is always to over-disclose.
Reviewing the Disclosure (Buyers)
Sometimes, it can feel overwhelming when the seller has disclosed a long list of things. It can feel scary to face some of these issues, and you may opt to pass on the property altogether. It is important to take each item individually and evaluate it by itself. Some items are easy fixes, while others may be more costly.
It’s imperative that you have a good picture of what has happened with the property. Ask lots of questions – to both your agent and your home inspector! Your Big Island real estate advisor should be able to get more information from the seller’s agent if there are clarifications needed based on what’s been revealed on the disclosure form or the inspector’s report.
Your Big Island Real Estate Advisor
Overall, the form is relatively straightforward, although it may seem daunting to fill out and read through. But yes, to answer the question if the seller’s disclosure matters, the answer is a resounding “yes!”
Only you can decide what you’re willing to deal with when it comes to your new property, but my job as a trusted Big Island real estate advisor is to help you make the best decision possible about your next home purchase. Contact me, and we can get started looking at Big Island homes for sale!
With Aloha,
Leeana
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