Category Archives: home sale documents

Why a Condition Report Is Important

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Real estate condition reportSellers have to complete, and provide, a ton of paperwork when selling their home, including the Real Estate Condition Report. And though the Condition Report looks like just another document in the pile sellers need to fill out, the Condition Report is more than just a mixture of ink and paper pulp. It’s important, and complicated.

In 1992, Wisconsin became one of the first states requiring sellers to fill out a document disclosing defects that could affect the value or structure of a property. The Condition Report needs to be part of all transactions involving 1-4 properties and has more than 20 categories of disclosures, including important items such as unsafe well water, roof defects and problems within the electrical system. If the property does not have a defect in that category, and has never suffered damage as a result, the seller can indicate that the property is clear in that area.

Why is this document seen as complicated? While buyers see the Condition Report as a valuable disclosure, this simple document often presents a conundrum for sellers. Most sellers see the report as a put-off for potential buyers instead of a valuable disclosure that protects sellers from legal recourse during and after the sale of their home. But it has to be done, and done truthfully—for buyers and sellers.

So what do sellers have to include in the report? Everything—and what was done to fix it.  If a problem occurred on the property, even for an insignificant length of time, it needs to be included in the report. Include the issue, what was done to fix the problem, and that it never happened again. For instance, if the basement flooded with a foot of water for a just a few hours 10 years ago, the flooding needs to disclosed. Also write down that the problem was caused by a faulty sump pump that was replaced that same day. Same with that leak in the roof. Or the pipe that burst in the bathroom.

The report cannot be completed by a seller’s Real Estate Agent. Truly, the Condition Report is not protecting the Real Estate Agent, it’s protecting the sellers. That’s why sellers need to fill this important document out—and fill it out completely with full disclosure. A completed Condition Report is more than just a piece of paper. It’s a shield for sellers now—and after the sale is complete.