Why Being Upfront About Your Home’s Flaws Can Speed Up the Selling Process

Does your home have a leaking roof? Is the HVAC equipment on its last leg? Does your basement flood after every big rainfall? While your first instinct might be to hide such flaws when you put your home up for sale, your best bet is actually to be upfront about them.

Actually, the law in most states requires home sellers to list any defects in paperwork regarding the home they are planning on putting on the market. The truth is, most sellers and their agents see this paperwork as nothing but a pain. Why would anyone bad-mouth their home to potential buyers? It’s like shooting yourself in the foot, right?

If you don’t disclose problems with your home that you knew about, you can find yourself in legal hot water. Not only will you eventually lose the buyer, but you’ll have to put the property back on the market or renegotiate for a much lower price.

If you and your agent handle this disclosure properly, it can actually help you optimize your marketing strategy. Consider the following 4 tips to make the disclosure of flaws in your home work to your benefit.

1. Have a Home Inspection Conducted Before You Even Put Your Home Up on the Market

A lot of sellers might scoff at the idea of having to pay a few hundred bucks for an inspection that’s typically paid for by the buyer at the point of purchase. After all, why not let someone else flip the bill?

The truth of the matter is, you can actually save some money by having the inspection done beforehand, even though you’re dishing out the cash for it. Let’s say you list the home for sale at an attractive price that will get a home buyer interested enough to make an offer. They’ll wind up having their own inspection done. If they find something they don’t like, they can either ask you for extra money to take care of the issues before they move in, or simply walk away from the deal. You’ll wind up having to put the house back on the market if the buyer bails on you. People will wonder why the first deal fell through, which will force you to disclose what the issue was in the first place.

Instead, you could price the work needed to resolve the issue into the asking price, and disclose the issue with the buyers up front. This will keep your net proceeds higher compared to crediting the buyer.

2. Make Sure Your Agent is in the Loop

Your agent should know every tiny detail about your house. After all, they’re the one who is dealing with every single individual involved in the transaction, and are essentially your team partner. Before even agreeing to list the house, they need to know if there’s anything wrong with it. Your agent will be able to accurately advise you on the right listing price and strategy for the market if they are in-the-know about any defects. If your home needs the electrical wiring replaced, for instance, this can be factored into the asking price.

3. Be the Source of Defect Disclosure

Don’t let potential buyers find out from other people about problems with your home. Ideally, this information should come from you, the seller. Let your buyers know before they make an offer about any past basement floods that occurred and were rectified, or a leaky roof that was replaced. Being upfront and transparent with your buyers will show them that you are honest seller. You never know, they might even pay more for the peace of mind of having issues disclosed up front instead of them finding out about them after they’ve moved in.

4. Have the Buyer Sign the Disclosure Paperwork

Who wants to be chin-deep in legal battles long after a home has been sold? While the idea of relying on a person’s word sounds ideal, it’s not realistic. Some buyers might regret their purchase for whatever reason, and some may even go after the seller. To avoid this headache, make sure the disclosures are in writing, and that all parties have signed off on it. Think of this as a professional business transaction, and treat it accordingly.

The Bottom Line

Being fully transparent and up front about any flaws with your house is just good business. It helps make the sale process quicker and more streamlined. At the end of the day, full disclosure could help save you both time, stress, and money.