Real Estate Transactions
What Is a Seller Disclosure?
A seller disclosure is a document in which the seller of a property reveals known material defects, conditions, and other facts that could affect the property's value or desirability. Most states require sellers to complete a standardized disclosure form before or shortly after a purchase contract is signed.
Seller disclosures are a major testing area on state licensing exams because they sit at the intersection of ethics, agency duties, and contract law.
Disclosure Requirements
Material Facts
Sellers must disclose known material facts — any condition that would reasonably affect a buyer's decision to purchase or the price they'd pay. This includes structural issues, water intrusion, pest damage, HOA disputes, and known environmental hazards.
Lead-Based Paint
Federal law (RESPA/HUD) requires disclosure of known lead-based paint in homes built before 1978. Sellers must provide a lead-based paint disclosure form and give buyers a 10-day window to conduct lead inspections.
What Sellers Don't Have to Disclose
Most states exempt facts that are physically observable (buyers can see them), matters of public record, and — in many states — stigmatized property facts like deaths, crimes, or alleged hauntings unless the buyer asks directly.
Agent Duties
Agents must also disclose material facts they know about — regardless of whether the seller disclosed them. An agent cannot help a client conceal a known defect. Failure to disclose can result in license suspension, lawsuits, and rescission of the contract.
Exam Key Points: Seller Disclosures
Sellers must disclose known material defects that affect value or desirability
Agents have an independent duty to disclose material facts they know
Lead-based paint disclosure is federally required for homes built before 1978
Buyers get a 10-day right to inspect for lead-based paint
Concealing a known defect can result in license revocation and lawsuits
Disclosure requirements vary significantly by state — know your state's form and rules
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