What purpose does a property disclosure statement serve?

A property disclosure statement primarily serves to disclose known defects of the property to potential buyers. This document is a crucial aspect of the real estate transaction process, as it provides transparency about the property's condition. Sellers are legally required to inform potential buyers of any material defects that could affect the property's value or the buyers' willingness to purchase. This includes both physical defects, such as water damage or structural issues, and other known issues, like problems with plumbing or electrical systems.

By providing this information upfront, the property disclosure statement helps buyers make informed decisions and potentially avoid costly surprises after the purchase. It also protects the seller from future legal liabilities that may arise if undisclosed issues are discovered after the sale. The statement is intended to foster trust in the transaction and is often a legal requirement in many jurisdictions.