What Sellers Disclosures Are Required When Selling a House in Texas?

Despite the economy taking several twists and turns in the last few months, the Texas property market has hardly been affected. 

Out-of-state buyers are still snatching up properties thought to be a steal because of the state’s reasonable cost of living and housing prices. Of course, all this buying and selling has highlighted the sellers’ disclosure Texas sellers need to provide during the transaction. If you’re uncertain what those disclosures are, this guide details what to disclose and when to make a seller’s disclosure.

Laws Governing Sellers Disclosures

If you’re selling a property in Texas, you have a legal requirement to make an honest seller’s disclosure, according to Texas Property Code Section § 5.008.  

The law details what sellers of single-family residential properties must reveal to buyers when selling the home and emphasizes relaying the property’s known material defects.

Beyond material defects, a seller must furnish a potential buyer with the seller’s disclosure form before or on the day the buyer enters into a contract to purchase the home. 

As a seller, it is your responsibility to disclose known defects about the property before a buyer becomes bound by the contract to purchase, considering the information revealed through the disclosure may affect their interest in the property or the price they’re offering.

To make it easier for sellers, TREC, the agency responsible for overseeing real estate transactions, has created a standard sellers disclosure Texas sellers can use to abide by the laws. But if you’re using a flat fee MLS like Houzeo, you’ll get a legally-binding digital form, making it far easier to provide buyers with the disclosure. 

What happens if you fail to provide the seller’s disclosure before the buyer signs the sale contract?

Although you won’t be fined or imprisoned for breaking the law, after you give the buyer the disclosure, they have seven days to cancel the contract without any penalty to them. Aim to avoid this experience because it adds additional stress to an already stressful situation.

When you give the buyer a seller’s disclosure, be sure you retain a copy as proof that you’ve met your obligations.

What You Need to Disclose in the Sellers Disclosure

Now that you understand when to give the disclosure and where to get a seller’s disclosure, you should be attentive to what you need to include in your seller’s disclosure.

What You Know About the Property

The first part of the seller’s disclosure Texas homeowners need to complete asks you about the structure of the home and what it contains. This is a straightforward process, as you only need to identify the elements your home has, like a swimming pool or central air conditioning, and then reveal if these elements have any known defects.

What You Don’t Know About the Property

You don’t need to hire an inspector or engineer to verify your claims or uncover issues with the property. Instead, the law states you must complete the seller’s disclosure to the best of your “belief and knowledge.” This means you should disclose every defect you are aware of but don’t need to dig to find more defects or possible defects. In cases where you’re unsure, the form allows you to select “Unknown” as an option. 

Selecting “unknown” indicates to the buyer that they may be taking a risk on the property’s condition, as you cannot verify that that aspect is in good working order.

But, this doesn’t mean you can exploit this rule to hide defects. If something is blatant, like there isn’t any electricity in the home or the upstairs toilet leaks every time you flush it, don’t think you’ll get away with failing to disclose these defects.

The Property’s History

The seller’s disclosure will also prompt you to insert information regarding the property’s repair history and other aspects of concern. If the property has experienced structural damage before, you need to disclose this. If it has or had a termite infestation, you need to disclose this.

You will also be prompted to reveal if the home has been exposed to radon gas or other toxic substances. However, if you’re unsure, you don’t need to hire an inspector to find out.

Privacy Concerns

You also don’t need to disclose if a person has died by natural causes, suicide, or “an accident unrelated to the condition of the property” on the property or if a previous owner had HIV or AIDS, as these are privacy violations and don’t concern the structure of the home. However, if a murder or death related to the property’s structure occurred, you’ll need to disclose these.

To ensure you aren’t held liable for anything you failed to disclose, your best bet as a seller is to be honest about the home’s condition. If you’re honest, there’s less that can go wrong.