What is the purpose of a property disclosure statement?

The purpose of a property disclosure statement is primarily to inform buyers of known issues or defects with the property. This document is crucial in real estate transactions as it promotes transparency between the seller and potential buyers. By disclosing any issues—such as past flooding, structural problems, or issues with appliances—the seller helps buyers make informed decisions regarding the property. This disclosure can significantly impact a buyer's willingness to proceed with the purchase, often serving to protect the seller from future legal claims related to undisclosed defects.

While outlining the terms of the sale, providing financing options, and estimating property taxes are all important aspects of the home-buying process, they are separate from the intent and function of a property disclosure statement. The focus of such a statement is specifically on the condition and history of the property, ensuring that buyers are aware of any pertinent issues before making a commitment.