How to Read a Property Disclosure Statement

When buying a home, the excitement of house-hunting often overshadows the fine print—but one document you should never overlook is the property disclosure statement. This legally required form gives buyers important insight into the condition of the home and can help you avoid costly surprises down the road. Here’s what every buyer should know about reading it.

What Is a Property Disclosure Statement?

A property disclosure statement is a document completed by the seller that outlines known issues with the property. While requirements vary by state, sellers are generally obligated to share any problems that could affect the home’s value or safety.

Key Sections to Pay Attention To

1. Structural IssuesLook for notes on the foundation, roof, walls, and major systems. Cracks, leaks, or repairs may indicate underlying problems that need inspection.

2. Water Damage and MoldAny history of flooding, plumbing leaks, or mold should be taken seriously. These can lead to health risks and expensive repairs if not addressed properly.

3. Electrical and Plumbing SystemsDisclosures should mention whether wiring, outlets, or plumbing have been updated—or if there are known issues like frequent circuit trips or low water pressure.

4. HVAC and AppliancesCheck the age and condition of heating, cooling systems, and major appliances included in the sale. Older systems may need replacement soon, which adds to your costs.

5. Pest or Termite ProblemsPast or present infestations should be disclosed. Even if treated, make sure there’s documentation of the work completed.

6. Neighborhood or Environmental FactorsSome disclosures may include noise concerns, drainage issues, or environmental hazards like radon or asbestos. These factors can affect both comfort and resale value.

Red Flags vs. Normal Wear and Tear

Not every item listed is a dealbreaker. A disclosure might mention small cracks in the driveway or an aging water heater—normal issues for many homes. What you’re looking for are major red flags like structural instability, recurring water damage, or hazardous materials.

Always Pair with a Professional Inspection

A disclosure is based on the seller’s knowledge; it’s not a guarantee that the home is problem-free. Always hire a licensed inspector to verify the condition of the property and uncover issues the seller may not know about.

✅ Bottom Line: A property disclosure statement is one of the most valuable tools buyers have to make an informed decision. By reading it carefully, asking questions, and following up with inspections, you’ll protect your investment and avoid unpleasant surprises after move-in.