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Step: 9 Review Seller's Disclosure

Before writing an offer, reviewing the sellers disclosure is is a must. Now, what is it and why is it important? Let’s break it down:

The Seller’s Disclosure (Form 17) is a document that is completed ONLY by the seller (not their agent or any other party) where the seller discloses any existing material facts or material defects to the buyer based on the seller's actual knowledge of the property at the time the seller completes the disclosure statement. This is very important to review because in this document you can discover defects with the home, if there are any known, before even moving forward with the transaction. With this being said, if nothing problematic shows up on the Form 17, this doesn’t mean the inspection will come out with no issues, but it is a preliminary check for you as the future buyer to want to review in case the seller is aware that there is a roof issue or easements on the property that affect future use. Let’s go into into a little more detail about what each section of the Form 17 explains:

Section 1: Title

As a potential buyer you need to know if you can use this property for its intended use or for what you would like to use it for. For example in this section the seller will disclose if there are any known easements or boundary disputes, encroachments, or zoning restrictions. All of these items are valuable to know about. With an easement someone else may have the nonpossessory right to use or enter the property of another (in this case you as the potential buyer) without possessing it. In terms of privacy, maybe this is something that you don’t want on your future property so it’s a great idea to look out for that in this form. There could also be zoning restrictions where certain construction on the property isn’t allowed and you had intentions of building a shop for an automotive business for example. With that being said, this is why you want to read over this section to see if this property is something you want to invest in.

Section 2: Water

In this section the seller will disclose the property’s water source and if there are any defects or certain water rights with the property that the potential buyer should know about. It will also touch on if there is a sprinkler system on the property and what its condition is, as well as if there are any irrigation rights for the property. This section is important to look over as you would want to know that all water sources will be functioning properly, etc.

Section 3:Sewer/On-site sewer system

This section is where the seller explains the type of sewer system that the property has. It can either be connected to a public sewer or to the property’s very own on site sewer system (septic). The seller will also disclose in this section if there are any known problems with the system whether the home be connected to public sewer or its own on site sewer system. You as the potential buyer should look very closely at this section. If there are any KNOWN problems, you can ask the seller to repair them when the inspection period rolls around, but if they do not agree than realize that sewer problems can be very costly. If there are not any known problems, it is still recommended that you get an inspection done on this system because it may have been years since the seller has had an inspection and once again if there are any issues it could be costly.

Section 4: Structural

This section is where the seller will disclose any known facts about structural issues with the property. This could be anywhere from a bad roof, flooding basement, to any defects with siding or doors etc. Here the seller will also disclose if there has been any additional improvements made to the property and if all the permits were obtained. This is vital information to know because for example if the roof leaks then you know that this could mean additional problems such as mold, which may not be something you want to deal with right off the bat when buying a new home. In any case once again, it is always recommended that you do an inspection once after contract but in any case this section will give you a good idea to whether or not you may be opening a bigger can of worms than you thought.

Section 5: Systems and fixtures

Here the seller will disclose if there are any known defects with the systems or fixtures that are apart of the property. It will also touch on if there are any leased items with the property like security systems or satellite dishes and if they are included with the transfer of the property. Also this section goes into carbon monoxide alarms and if they are installed in the property. This is important to know for safety and also the seller must have them installed if they are not.

Section 6: Homeowners Association/Common Interests

This section is pretty self explanatory and basically addresses if the property is required to be apart of a homeowners association, if so what are the dues, and what are any other restrictions and/or requirements of being apart of the community.

Section 7: Environmental

This section is imperative to look closely at. Here the seller will disclose if there any known environmental hazards with the property. Example, if there had been any flooding or standing water on the property, if there has been any serious damage to the property given an earthquake, fire, or landslides have occured, or if there are any wetlands on the property that the buyer should know about. Further in this section there are questions to the seller about if there are any hazardous materials on the property that they know about or if the property has been used as an illegal dumping ground, etc. The house itself may be in good condition but the land in which it is on could be at risk to serious damage or may has already been and it could affect future usage of the property.

Section 8: Lead Based Paint

Lead based paint is a hazardous paint that was commonly used in structures built in 1978 or before. If the home you are wanting to purchase has been built in 1978 or prior to then take a close look at this section. If it was not build in 1978 or prior, you don’t have much to worry about but still take a look at this section to make sure it is filled out so the form 17 is valid.

Section 9: Manufactured and Mobile Homes

If the property is a manufactured home then it is important to look at this section because it will explain if any improvements have been made to the home and if they were, then it will ask if the proper permits were obtained.

Section 10: Full Disclosure by Sellers

Here is where the seller will disclose if there are any other defects with the property that may not have been addressed earlier in the form and they have to explain what the defect is. The seller will also sign in this section stating that the previous answers to this form are completed and correct to the best of the seller’s knowledge.


If the seller is to answer “yes” to any of the of the asterisked items they must explain in further detail on attached sheets if available and not otherwise publicly recorded. Some of the items they could answer yes on is if some of there are any defects or repairs needed with certain items, if there are any easements or encroachments known, or if there has been any additions or remodeling done to the home, etc. An important not to keep in mind which is also stated on the Form 17 is that the following disclosures are made by the seller and not the representations of any real estate licensee or other party.

You as the buyer have 3 business days from the day the seller or seller’s agent delivers this disclosure statement to rescind the agreement by delivering a separately signed written statement of rescission to the seller or the sellers agent. Sometimes when the listing goes live the listing agent will have already uploaded the Form 17 which we as your agent can screen ahead of time to see if there are any major red flags on the property. However, if they do not upload this document and give it to you prior to mutual acceptance than you have 3 business days from delivery to rescind the agreement in the manner stated above.

Then there are three different places for you as the buyer to sign, given you are wanting to put an offer in on this property. The first signature under Buyer’s Acknowledgement states that you have received a copy of the Form 17, and really nothing more.

The second signature line states that you have read and reviewed the seller’s responses on the seller’s disclosure. It also states that you approve this statement and therefore waive your right to revoke your offer based on this disclosure.

The third signature line states that you the buyer has been advised of your right to receive a completed copy of the seller’s disclosure statement. But the buyer waives that right if this line is signed. However, if the answer to any of the questions in this section entitled “Environmental’ would be “yes”, buyer may not waive the receipt of the “Environmental” section of the statement.

We here at the Puget Sound Real Estate Team have strategies that we recommend when it comes to choosing which of the three signatures options you should pursue. This strategy can create a way for you to secure a property and still maintain an opportunity for you to terminate the agreement and receive your earnest money back in full, if you choose to do so.

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