What is a "property disclosure statement"?

A property disclosure statement is a document that a seller provides to a potential buyer, detailing any known issues or defects related to the condition of the property. This statement is integral to the real estate transaction process because it helps inform the buyer about the property's history and current state, enabling them to make a more informed decision.

By requiring sellers to disclose issues such as past water damage, mold presence, or problems with the roof, the statement promotes transparency and fosters trust between parties. It also serves to protect sellers legally by documenting the condition of the property at the time of sale; failure to disclose known issues can lead to legal claims from the buyer in the future.

In contrast, other options do not accurately represent the purpose of a property disclosure statement. For instance, a survey of property boundaries is related but focuses on land measurement, while a legal agreement reflects terms of sale rather than property condition. A financial statement regarding repair costs pertains to financial disclosures rather than the physical state of the property.