The Texas Real Estate License Act requires that you be advised that there are agency relationships that govern how a real estate salesperson may deal with you when purchasing, selling or leasing real property. Before you enter into a substantive discussion with Cherokee Real Estate Company, Inc., or any other brokerage, be sure you have an agreement with the broker as to what your relationship with him will be and even how it may change from time to time. You should not disclose any personal information or disposition to a broker until you have established your relationship with him. The broker will be happy to discuss and explain agency relationships with you.

Seller’s Disclosure Notice

Whenever the owner of a single family dwelling sells his home he is required by Texas law to provide a prospective purchaser with the “Seller’s Disclosure Notice”.  The form can be found on the Texas Real Estate Commission’s website.  You can also go to this link in order to download the form: .  This form is required by law, whether or not you are using the services of a real estate licensee (agent, realtor®).  If you are working with a real estate agent and the agent is a realtor®, there is a more comprehensive “Seller’s Disclosure Notice” that the agent may use.

Whenever an individual wants to sell his home it is important that he fully disclose all known conditions and defects in his home.  If he knows of a defect or a condition that could affect the use of the home, he needs to disclose it.  To not disclose a known condition could result in a civil suit.  Under the Deceptive Trade Practices Act, not disclosing a known condition or a condition that the seller should have known about could result in damages equal to three times the cost to remedy the condition.  There have been instances where a buyer elected to not purchase a home because of its condition and where the buyer offered to share the inspection with a seller who refused to accept the inspection report.  This is where the phrase “should have known” kicks in.  Later on, someone else bought the home and just happened to meet the buyer who did not buy the home because of its condition.  The prior buyer mentioned the condition to the current buyer.  This is where the lawsuit kicked in and the seller got hit with a triple damage judgment.

There are certain instances where a seller’s disclosure is not required.  They are the following: a property being sold at a foreclosure sale; a sale by a bankruptcy trustee; by a mortgagor (typically  the owner) to a lender (mortgagee); when the administrator of an estate sells the home or when a guardian, conservator or trust sells the home; a sale of one co-owner’s interest to another co-owner;  a sale or transfer to a spouse or a relative; the sale from one spouse to another under the dissolution of a marriage; a sale to or from a governmental entity; the sale of a new residence; the sale of a dwelling whose value does not exceed five percent of the value of the entire property.

What kinds of disclosures does the “Seller’s Disclosure Notice” contain?  Lots!  The realtor® form is five pages long.  It asks if the seller is occupying the property and, if not, for how long.  The first page asks what components the home has, such as does it have a disposal, central heat and air, cable TV wiring.  The seller can answer “yes”, “no.” or “I don’t know.” in terms of what the home may have..  There are 56 questions on that page.  After all the questions are answered the seller must state if he is aware of any defects in any of the components.  On the second page, the seller has to state where the drinking water comes from, what type of roof the house has and its age.  He then is required to disclose his knowledge of any defects in any of the structural components of the home.  On the second half of the page, the seller has to disclose if he is aware of certain conditions in the home, such as the presence of aluminum wiring, if the home is in a flood plane, if there are termites, asbestos components, lead-based paint, etc.  This section has 36 questions and the seller has to indicate his knowledge of any defects in any of the aforementioned.  Most of the questions on page three ask questions about code compliance, violation of deed restrictions, conditions affecting health, deaths the involved violence, etc.  There are 11 questions.  Page four asks if the seller has a survey, if there have been home inspections, if there are any tax exemptions, such as the homestead exemption, if there have been insurance claims, if the smoke alarms are installed in compliance with the law, etc.  Page five basically asks the seller to name all the companies who provide service to the house, such as water, gas, electricity, sanitation, etc.  It is important that the “Seller’s Disclosure Notice” be filled out properly.  That is why I always walk the seller through the filling out of the form.  Too many sellers leave the form incomplete when they are left on their own to fill it out.

Sometimes it behooves the seller to have his house inspected to that he can disclose all known defects up front.  Doing this can protect the seller.  When I give the “Seller’s Disclosure Notice” to a prospective purchaser, I will tell the purchaser that the seller is disclosing what he knows and that that does not mean that the seller is aware of all defects.  That’s why an inspection by the buyer can be of great value.  One other thing to keep in mind: The contract price of a home may very well be reflective of a home’s condition and it is not always appropriate to try and get the seller to knock the price down any further.