Review the Seller’s Disclosure Form Prior to Closing on a Home Purchase

If you are purchasing a home in Wisconsin, prior to closing the seller will usually provide you with a property disclosure form. State law requires that home sellers disclose any condition or defect that would result in a significant negative effect on the property value, significantly impair the health or safety of future occupants, or significantly shorten or negatively affect the normal life of the property.

The information contained within the seller’s disclosure document will help you to determine whether (1) property flaws will require repair prior to closing, (2) the offer price needs adjustment, or (3) the defects warrant outright cancellation of the offer.

The standard state disclosure form follows a simple format, where the seller is required to answer a series of questions about prospective problems regarding the house and/or the land itself. The seller must provide additional information for any question answered in the affirmative.  In order to disclose a defect, the seller must be aware that it exists in the first place and must reasonably believe that the defect will have a significant negative effect on the property.

Carefully review the answers on the disclosure form and compare those answers with your own observations of the property and what you remember from the showing. Note any answers that seem to contradict your own observations; these may warrant further investigation or negotiation.  You should also consider having a professional property inspector do an assessment of the property.     

A few words of caution about relying of the disclosure form.  First, the disclosure is not a warranty; in other words, the seller is not making any sort of guarantee that the property is in perfect condition – few houses are.  Second, the seller cannot be held responsible for unknown flaws that are discovered post-closing provided that he or she completes the disclosure form in good faith.     

Most buyers will have little idea of who the seller is, much less whether the seller is savvy enough to be able to identify all major problems existing in the property up for sale. The disclosure form is therefore only one tool to be used in determining whether the property is free and clear of any major problems.