Question

For home sellers, which of the following is a benefit of the seller's property disclosure statement?

a) It forces the seller to make home repairs they would otherwise have avoided.
b) It gives sellers the right to conceal material facts and known defects about the home for sale.
c) It provides the seller with protection against liability and potential legal action.
d) It removes transparency from the process, making the sale easier for the seller.

Answer 1

The benefit of the seller's property disclosure statement for home sellers is that it provides protection against liability and potential legal action by informing buyers about known property defects. Additional reassurances such as warranties and service contracts can also be offered to manage imperfect information. Correct option is c.

Step-by-step explanation:

For home sellers, a benefit of the seller's property disclosure statement is c) It provides the seller with protection against liability and potential legal action. This disclosure is a form of transparency where sellers inform potential buyers about the property's condition, which includes detailing any known defects or issues.

By disclosing known problems, the seller is less likely to face legal disputes after the sale because the buyer was made aware of these issues before purchasing.

Furthermore, sellers might reassure possible buyers by offering warranties, which are promises to fix or replace the good for a certain time period, or service contracts that allow buyers to pay an additional amount for guaranteed repairs over a set period. These strategies act as ways to manage imperfect information, increasing trust and encouraging the purchase.