The saying “buyer beware” may be good for consumers of traditional goods but not in the real estate world. Sellers including their agents could not afford to remain passive when it comes to real estate defects if they do not want to end up in litigation. And even if you and your buyer agreed on an “as is” contract this would not hold water when used as a defense in litigation. Knowingly concealing information from a potential real estate buyer can apparently cost you later on so make sure to point out any problem with your property even during the negotiation stage.

This is the reason why disclosure is an important part of real estate transactions. If you are a home seller then you are required by law to disclose material facts about the true state of your property including plumbing problems. So which problems are you required to disclose? And which are classified as material? As a general rule, anything that might influence the buyer’s decision to purchase the property is material information.

Make sure you prepare a written disclosure document involving your property’s plumbing, electrical connection, asbestos insulation, encroachments and similar information. Remember that each state has a different disclosure requirement so make sure you inquire which applies to your state.