Seller’s Duty to Disclose Latent Defects in Real Estate
Every FSBO seller must understand disclosure laws. A latent defect is a hidden problem that affects value or safety but isn’t visible to the buyer. Here’s what you’re required to disclose and how it impacts your sale.
📌 What Is a Seller’s Duty to Disclose?
Real estate laws require sellers to be honest about the condition of their property. You must disclose known material defects that could affect a buyer’s decision to purchase, even if the home is sold “as-is.”
Disclosure rules vary by state, but the principle is the same everywhere: buyers should not be misled about major issues that aren’t obvious during a casual inspection.
🔎 What Are Latent Defects?
A latent defect is a hidden issue that a buyer cannot easily see. Common examples include:
- Foundation cracks behind finished walls
- Leaking roof covered with fresh paint
- Mold inside walls or attic insulation
- Faulty wiring or plumbing not visible at walkthrough
Sellers have a duty to disclose these issues if they are known. Failing to do so can lead to lawsuits, rescinded contracts, and damages after closing.
🏠 What About Selling “As-Is”?
Many FSBO sellers think an as-is sale means they don’t have to disclose defects. That’s not true. Selling “as-is” only means the seller won’t make repairs before closing — you still must disclose any known problems.
An “as-is” listing simply puts buyers on notice that they’re accepting the property in its current condition, but it does not eliminate your disclosure obligations.
💡 Why Disclosure Matters
- Prevents disputes and lawsuits after closing
- Protects the seller from claims of fraud or misrepresentation
- Builds buyer trust, which can lead to smoother negotiations
- Keeps your FSBO sale in compliance with state law
📌 FAQ: Seller Disclosure Laws
Q: Do all states require written disclosure forms?
Most states require written disclosure statements, but the exact format and required items vary. A few “buyer beware” states still put more burden on the buyer, but outright concealment of defects is never allowed.
Q: Can I sell my home as-is and avoid disclosures?
No. As-is sales relieve you from making repairs, not from telling buyers about known problems.
Q: What happens if I fail to disclose?
Buyers can sue for damages, demand repairs, or even cancel the sale. In some states, sellers may be liable for triple damages.