Disclosure statements differ widely from state to state and from one area to another within any given state. Generally speaking, the law requires that you disclose to prospective buyers any information you have that materially affects your property's value or desirability. This disclosure must cover facts that you, as an owner, are expected to know about your property and the neighborhood that couldn't be known by (or wouldn't be apparent to) the buyer. For example:

• Physical condition
  Are your built-in appliances in good working order? Do you know about any hidden defects or malfunctions in your house's major components (roof, foundation, electrical system, plumbing, sewer, insulation, windows, doors, walls, and so on)? No one expects you to be a professional property inspector, and disclosure laws are one reason why getting a premarketing inspection of your house is wise. You and your agent should also encourage buyers to conduct their own investigations and obtain inspections from their own experts instead of relying solely on your inspections or the information you provide about the property's physical condition.

• Health, safety, and environmental hazards
  You must comply with federal, state, and local disclosure laws regarding property problems related to asbestos, formaldehyde, lead-based paints, underground fuel or chemical storage tanks, radon gas, and other health hazards. Is your property in harm's way from earthquakes, floods, hurricanes, or other natural disasters? Does your property comply with local energy or water conservation ordinances?

• Legal condition
  Are any lawsuits pending that affect your property? Did you make any modifications or alterations to your property without getting the necessary building permits? Do these modifications or alterations comply with state and local building codes? If you're selling a condominium, you must give the buyer copies of the Covenants, Conditions, and Restrictions (CC&Rs), the Homeowners Association bylaws, and the budget.

• Subjective areas
  Subjective questions can't be answered with a simple yes or no. The environment that you think is extremely quiet, the buyer may consider a boiler factory. Answer all subjective questions to the best of your ability, and then encourage buyers to familiarize themselves with the area so they can draw their own subjective conclusions about these issues.If you're not sure whether or not you have to make this type of disclosure about your property, consult your listing agent.

Disclosing Work Done Without Permits
This cautionary note is for do-it-yourselfers who've done carpentry, plumbing, and electrical work around the house without getting a permit for the work or having it inspected by their local building department. When you sell, you should document in writing about any work performed without a building permit.

Your written disclosure serves to protect you if the buyer sues you about it after the deal closes. Remember: The key to avoiding lawsuits is complete, timely, written disclosure of all problems so your buyer can make an informed purchasing decision.

The best defense is a good offense. Here are three steps you can take to reduce the possibility of a legitimate lawsuit:

1. If in doubt, disclose.
   If you have to ask whether or not to disclose something about your property or the neighborhood, you've probably answered your own question. Over-disclosure is best.

2. Put your disclosure in writing.
   Most states have Property Disclosure forms which require a seller to put all disclosures in writing. This disclosure is signed and distributed to potential buyers.

3. Hire a professional to inspect your house prior to putting it on the market.
   After seeing the results, you have the option of fixing defects you want to repair and disclosing the others.