Arizona Real Estate Exam Prep: Disclosures
What Is A Disclosure?
A disclosure provides notice to another party of information known by another. In real estate, this normally takes the form of seller’s disclosing defects with the property that they are selling to the buyer. Sellers are encouraged to disclose all of the defects that they are aware of. A cracked garage floor may be a very obvious thing to disclose, but what about a leak in the ceiling from a few years back? This is where Latent and Material defects come in to play.
Latent Vs. Material Defects
Latent defects are those that can’t necessarily be readily seen or accessed. Previous water damage from a leaky roof is a prime example of this. On the other hand, a Material Defect is much more obvious and may effect the material purchase price to be paid. A collapsed deck in the backyard or a crack running the length of the living room floor are examples of this.
Regardless of the kind of defect, it’s important that sellers disclose to buyers the defects of the home that they are selling. Complementing these disclosures, a smart buyer will then get a home inspection completed by a licensed home inspector.
You may find the latest information on the Arizona Department of Real Estate’s website.