When selling a property in Maryland, a buyer needs to know what they are getting themselves into. Part of that is going to fall on the shoulders of the buyers as they complete their own due diligence. As such, the buyer has some homework to do. Buyers should research the neighborhood and schedule inspections of the property.

But if you are selling a Maryland property you are by no means off the hook. Like many states, in Maryland you are legally required to disclose known defects and other items to the buyer.

What do you have to disclose when selling a house in Maryland? Read on to find out!

Disclaimer: This blog post and website provides general information on Maryland real estate. Maryland Estates, LLC, doing business as Creo Home Buyers, and its authors are not liable for the accuracy or use of this information; consult with a trusted real estate professional or attorney for guidance regarding your unique selling situation.

The Disclosure Process in Maryland

In Maryland the seller is legally required to complete a property disclosure form. Its full name is the Maryland Residential Property Disclosure and Disclaimer Statement. This document must be completed as per Maryland code and includes both disclosure and disclaimer options.

* Your Maryland real estate agent is also required to make disclosures but more on that later.

What is interesting about the Maryland disclosure form is that it is actually two forms in one. The first three pages of the document are where you will include the disclosures  and the last page is a disclaimer form.

Now you may be wondering, what’s the difference between disclosure and disclaimer? When should I disclose? When should I disclaim?

These are very common questions when you are selling a home in Maryland. These can be answered by reviewing the disclosure requirements for your residential real estate in Maryland.

The simple answer is this. If you have lived in the home, it’s best practice to fill out the disclosure form. It will build the most confidence with potential buyers. It will also help shield you against issues and concerns during and after the home sale.

If you are selling a home as-is then the disclaimer form is probably just fine. But expect buyers to have many questions and be ready to negotiate. You may spend more time looking for a buyer as well if you are selling with a disclaimer.

The disclosure form, being three pages long, is a detailed list of areas and features of the property. You will go through the form, noting any issues you are aware of with these areas and features, adhering to disclosure requirements.

With a disclaimer the buyer is assuming all responsibility for the condition of the home. You are selling the property as-is. This means you do not need to provide as detailed of a disclosure statement because you are not disclosing issues with the property. There are exceptions we will cover later with material facts and latent defects.

After completing the form, you will sign and date it and the buyer will too.When The seller will fill out the form while signing and dating it. The buyer will sign and date the form as well, receiving a copy of it.

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The Importance of Disclosing Information when Selling a House

If you’re like most home sellers you may have the mindset of, “Do I have to disclose this?” It’s better to think, “What do I get to tell the buyer about my property?”

Disclosing issues with a property rarely stops a deal from going through, especially if all material defects are listed in the disclosure statment. In fact, it usually has the opposite effect. Disclosing information builds trust between the buyer and the seller. And trust is one of the biggest factors in a real estate transaction for building confidence.

The buyer is not likely looking for the property to be perfect. Everyone expects there to be an issue here or there. What buyers don’t like is surprises.

Disclosures also really help with negotiations for a couple reasons:

First, let’s say you fail to disclose an issue to a buyer such as a problem with the plumbing. You and the buyer have agreed on a price and the buyer is now getting the house inspected. The inspector finds the issue with the plumbing. Now the buyer is going to come back and ask for some type of compensation for this. They will likely want to lower the sale price and probably be concerned with finding more issues.

If you had disclosed the issue beforehand it all would have been taken care of when setting the sale price. You probably just cost yourself some money, if not a sale. 

Second, many people like to negotiate or at least feel like they are getting a deal. If you disclose any issues and price your property accordingly you can factor that in. You can leave yourself some wiggle room in the price to account for issues in the disclosure. Now the buyer feels good because the price has come down a bit for an issue they are fully aware of. You get things hashed out before the close and prevent a back and forth or potential roadblock. It really is a win-win when selling Maryland real estate. 

Items That Must be Disclosed When Selling a House in Maryland 

If you are filling out the disclosure portion of the form there are certain things you must disclose. The three pages of the Maryland form will detail what must be covered. You will have to disclose any knowledge you have of issues with things like: 

  • Structural issues – This includes issues with the foundation, the roof, or load-bearing walls, which are considered material defects.
  • Environmental hazards – List any hazardous materials that are present on the property. This means things like, but not limited to, mold, radon, and asbestos. Also, a 1992 federal law requires any house built in 1978 or earlier to have a lead-based paint inspection.
  • Pest History – This includes past and present issues with wood-eating bugs or rodents. Including detailing how the pests were treated.
  • HVAC – List any known issues with the heating or the cooling systems of the home. The age of the systems should be documented as well.
  • Plumbing/Electrical Systems – Include things like water damage to the property and leaking pipes. If your property has a septic system you will have to provide details about that as well. You also have to disclose known issues with any power outlets, wiring or electrical panels in the home.
  • HOA – Is your home part of a homeowner association? Then you must provide details about fees, dues and regulations related to the HOA. The buyer will also need a copy of the HOA resale packet and the seller is typically the one to provide this document. Maryland property sellers must also disclose any additional fees.

What is Not Disclosed in Maryland?

There are a few things in Maryland that a seller is not required to disclose. This includes: 

  • Deaths on the property – You only have to disclose deaths if they were due to an issue with the property. For example, if there was a structural issue that caused part of the home to collapse and there was a fatality.
  • Cosmetic Issues – Things like blemishes in the paint or dings in the hardwood floor do not need to be disclosed. Disclosures tend to be for items that are more structural or potential safety hazards.
  • Why you are moving – You are not required to tell the new owner why you are moving or selling the house. You are selling, that’s all they need to know.
  • Any future plans you have/had for the house – You only need to disclose information about the current or past condition of the home. Nothing about future plans for the property needs to be disclosed. If you were planning on replacing the roof in two years that is not information that needs to be disclosed.

Do I Have to Disclose Anything if I Fill Out The Disclaimer Form? 

Yes, you do! If you decide to file the disclaimer and not the disclosure you still have disclosures you must make. You and your agent will still have to disclose any material facts or latent defects. This includes any knowledge that could have a major impact on the buyer’s desire to buy the property. And anything that could have a significant impact on the value of the property.

For example:

Let’s say you had the floor redone in your basement a few years ago. And the contractors found a significant flaw in the foundation of your home. You may not have had the resources to fix it at the time and decided to ignore the issue. The new flooring now covers the area of the flaw such that it would only be detected if the flooring was removed. You must disclose this to the buyer, no matter what. It could have a significant impact on the value of the home or the buyer’s desire to buy. Additionally, if the buyer discovers the issue after buying the property and is able to prove that you knew about it before selling, you may have a lawsuit on your hands.

You can read more about the Maryland law in the Maryland Statute on disclosures.

So to summarize, whether you disclaim or disclose, you and your real estate agent must disclose any material facts or latent defects that you are aware of prior to selling the property.

Are Any Properties Exempt from Disclosures? 

There are a few situations in Maryland where a property can be exempt from the disclosure/disclaimer form. It’s important to note that this is just an exemption from filing the official form itself. You still must follow federal, state, and local disclosure laws. For example, you still need to provide a lead-based paint disclosure

  • Bank owned properties – Banks are exempt from the Maryland disclosure/disclaimer form. This situation is likely to come up if you are buying a home after it has been foreclosed.
  • Seller never lived in the home – Are you selling a home you never lived in? If that is the case you will not have to fill out the disclosure/disclaimer form. The idea is if you never lived there you have limited information about the property.
  • Newly built home – This one kind of ties in with the “seller never lived in home.” If the home is newly built then there is nothing for an occupant to disclose yet because it’s never been occupied. You also many not need to complete a disclosure form if the certificate of occupancy was issued within the last year. This situation is likely to come up if you are buying a new home directly from a property builder.
  • Transfers and trusts – If you are executing an estate or a trust you could be exempt. This can depend on many factors and get complicated fast. It’s best to involve an agent or attorney to be safe. 

How Do Disclosures Help Sellers? 

Disclosing issues to your buyer does a couple of things for you as a seller. And they all kind of build off each other as well. Daisy chaining your way to a successful sale. 

  • Transparency – The more transparent you are in the beginning,the fewer questions and concerns will come up later on. In other words, the more information you provide as the seller the more your potential buyer will trust you.
  • Build trust – Building trust in a short period of time can be a challenge. Honest and full disclosures can help overcome that challenge. 
  • Build confidence – Trust is a feeling and confidence is based more on actions. Once you have established trust, your buyer can become confident in how you will act. Confidence is what will close the deal. 
  • Minimize your risk – If the buyer has all the information about the home from the start, things are less likely to go wrong. Your home sale will go smoothly with no surprises rearing their heads. And in the months following the close you can be confident that the buyer won’t find hidden issues.  

How Do Disclosures Help Buyers? 

Disclosures truly help buyers in a few key ways. 

  • Making an informed decision – Buying a home is a big decision. It’s the most expensive decision many people will make in their life. Having as much information as possible can only be a good thing.
  • Inspection Process – Disclosures make the inspection process go quicker and more smoothly. If the inspector knows where and what to look for it gets rid of a lot of guess work. The inspector will have a heads up to pay special attention to certain areas. If the disclosures line up with what the inspector sees it’s an ideal situation. That will build real confidence in the buyer. 
  • Negotiations – If the buyer knows the true condition of the property, negotiating goes much better. The buyer feels they have some points that can help them swing the deal a bit in their favor. The seller knows what the buyer knows and can act accordingly. All while not being taken off guard by what the buyer might find.  

Conclusion

We hope that you found something in this article that helps you when completing disclosure forms for  selling your Maryland home. Or at least have a better understanding of seller disclosures in Maryland. 

Just one last tip before we go. When disclosing, take your time and when in doubt, disclose. Are you asking yourself if you should disclose something? Chances are it’s better for all parties involved to disclose it.  

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FAQ

What Are Material Facts? 

Material facts include anything about the property that could have a major impact on the buyer’s desire to buy. Such as anything that can significantly impact the value or safety of the property.

What are Latent Defects?

All latent defects are material facts, but not all material facts are latent defects. Latent defects, like material facts, are things that affect the value of the home or the buyers desire to buy it. But latent defects are specifically hidden or hard to see without thorough inspection. In fact, some latent defects are undetectable even with a proper home inspection, such as foundation issues below the ground. If you know about such defects, you must disclose them when selling. 

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