So you’re finally ready to sell your house. You’ve cleaned every nook and cranny, painted over those holes in the wall, and even got around to fixing that sticky door. As you gather all the paperwork in preparation to list it on the market, you come across a home inspection report from a few years back when a deal fell through.
“Ugh, do I really have to show potential buyers this old thing?” you wonder. I totally get it. That report probably outlines some costly repairs that you never got around to. Who wants to scare buyers away before they even step foot in the door?
As Tempting As It Is, You Can’t Bury Those Old Reports
Let me give it to you straight. Does seller have to disclose previous inspection: legal requirements dictate that yes, you do need to turn over those reports if asked. I know, it stinks. You wish you could just stash that cringeworthy paperwork in a lockbox and drop the key down a sewer drain.
But here’s the thing — failing to disclose what you know could come back to bite you. Hard. We’re talking lawsuits and fraud allegations. Once you’ve seen those inspection reports, you can’t un-see them. Even if you “conveniently” forget about some of those major foundation cracks, there’s no guarantee buyers won’t find out through other channels later on. Then you’ll have some explaining to do.
So as much as the thought of handing over that years-old laundry list of defects makes you cringe, you have to disclose significant problems outlined in past inspection reports. Let’s look at specifically what’s required and why it’s so important.
Your State Likely Requires You Turn Over That Paper Trail
Depending on where your home is located, your state’s real estate laws probably require disclosing previous inspections. For instance, here in Pennsylvania, the Seller Disclosure Law says you need to reveal any “material defects” found in past inspections after a deal went south.
This goes whether you got the inspection yourself earlier or a potential buyer had your home checked out before deciding to walk away. The source doesn’t matter — if big problems were uncovered, you now need to make buyers aware.
And “material defects” covers all sorts of expensive issues like:
- Structural problems
- Faulty wiring
- Roof leaks
- Foundation cracks
- Termite damage
- Flooding risks
So if that years-old inspection report highlighted any major concerns like these, you have to show your hand. Other states have similar requirements about revealing anything that might substantially impact desirability or value.
You’ve Got A Few Options For How to Disclose
Now that your state says you need to turn over these old home inspection reports if asked, how exactly should you do that?
You’ve got a couple choices:
- Update your Seller’s Disclosure statement. This is your way of giving buyers the heads up on any significant problems noted in the past. Attach extra pages if needed to lay out the issues and repairs made (if any).
- Hand over the actual inspection reports. Ideally, you should attach the full reports to the disclosure statement so buyers can view the specifics for themselves. But in some states, you can simply summarize the major findings instead of providing the reports.
- Write your own comments. What if you disagree with some points the inspector raised? Or fixed a few things since then? You can attach a cover letter explaining your stance. But this doesn’t get you off the hook for disclosing the overall results.
Any of these tactics help limit accusations that you deliberately tried to hide major defects outlined in previous inspections. Because coming across as sneaky or dishonest is never good when you’re trying to sell your home.
Failing to Disclose Can Cause Major Headaches Later
Think it seems like too much trouble to dig up those old reports and you’ll just take your chances? Let me give you a few reasons why that’s an epically bad idea:
Buyers can still uncover your buried secrets. In the age of information transparency, you can never guarantee those old inspection reports will stay hidden for long. Property records have a way of surfacing when you least expect it.
What if buyers chat with your neighbor who remembers the last deal falling through after an inspection? Or the buyer’s agent happens to find paperwork from that failed transaction in the listing history? Oops. Now you’ve got some uncomfortable explaining to do.
You could wind up in legal hot water. If buyers uncover issues in the future that you failed to disclose upfront, you might find yourself on the receiving end of a lawsuit. Knowingly hiding defects could amount to fraud in the eyes of the court. And no one wants to be fending off angry buyers and expensive attorneys after the sale closes.
Your credibility takes a major hit. Even if buyers don’t pursue legal action down the road after uncovering hidden inspection results, your reputation still suffers. Future buyers will inevitably hear through neighborhood chatter that you deliberately covered up issues. Good luck trying to defend yourself after that. No one wants to deal with a seller they can’t trust.
Moral of the story? Don’t let your temptation to hide unpleasant inspection surprises sabotage your home sale. Just disclose major issues uncovered in the past so buyers walk in with eyes wide open. It really is in your best interest, even if it stings a little initially.
Buyers Can’t Use Your Reports In Place Of Their Own Inspection
Now just because you hand over these past inspection reports doesn’t let buyers off the hook for getting their own done. Does seller have to disclose previous inspection: legal requirements say buyers can request your reports, not skimp on due diligence of their own.
It’s essential buyers have their own inspector check everything because:
- Old inspection reports might miss current issues. Things can change, and problems escalate over time if repairs aren’t made right away. Rather than assume your reports paint a complete picture, smart buyers will want an update from their own expert.
- DIY inspecting leaves buyers vulnerable. If buyers skip hiring their own pro and just rely on your old reports, they lose their right to come after you for any misinformation later. Oops. Always better to get an objective third party’s take.
- Multiple opinions provide perspective. By having their own inspection done and comparing reports from the past, buyers get greater insight. If there’s disagreement on issues, buyers can dig deeper with further evaluations before making an offer, rather than getting surprised down the road.
So make sure buyers understand that while you’re legally obligated to disclose previous inspection results if asked, your reports shouldn’t replace a top-to-bottom analysis of their own. A thorough, current inspection protects their interests as a buyer.
Over-Disclosure Is Always the Smarter Play
Let’s circle back to the question I’m sure is still floating around in your mind as a seller. Does seller have to disclose previous inspection: legal requirements? The answer depends on specific state laws but generally boils down to revealing material defects.
Still, as tempting as it might be to downplay minor flaws or slowly let damaging information trickle out over time, I always advise sellers to lay all their cards on the table from the start. Hand over those reports immediately rather than waiting for buyers to request them.
Why go above and beyond the legal minimum? Two key reasons:
1. It limits future liability. When you freely disclose everything upfront in writing, you help shield yourself from accusations of hiding info later on. Getting sued because angry buyers uncover past inspection reports you tried to bury? No thanks! Over-disclosure off the bat makes it tough to claim you were deceitful.
2. It builds trust and credibility. Trying to sweep negative inspection results under the rug just looks bad. And if buyers find out through back channels what you attempted to conceal, it crushes your credibility instantly. But freely handing over reports without being asked signals you have nothing to hide. This builds rapport and makes buyers feel like you’re someone they want to work with.
So while the law may only require revealing reports when asked, from a risk management and reputation standpoint, disclose them straight away. Save yourself PR headaches and trust issues by putting all the facts on the table upfront. Over-disclosure wins every time!
The bottom line is trying to ignore or hide past inspection reports won’t make serious property conditions magically disappear. And when word eventually leaks that you deliberately failed to disclose defects, no one will want to touch your listing with a 10 foot pole for fear of getting duped.
Spare yourself endless headaches by giving buyers full transparency into your home’s past right from the start. Hand over those reports along with your Seller’s Disclosure without being asked. Sure, it means acknowledging some uncomfortable realities about repairs needed. But restoring trust and credibility is well worth that temporary bruise to your ego!