What is the purpose of "disclosures" in real estate?

The purpose of disclosures in real estate is primarily to inform buyers of known issues with a property. Disclosures are an essential aspect of the real estate transaction process as they provide transparency between sellers and buyers. When sellers disclose any known defects or issues—such as structural concerns, pest infestations, or other material facts—they allow potential buyers to make informed decisions. This practice is crucial for maintaining trust and protecting both parties legally. Full disclosures can help prevent future disputes, as buyers cannot claim they were unaware of any issues that were properly disclosed prior to purchase.

Enhancing the aesthetic appeal of a property, assuring buyers of the property’s price, or eliminating the need for inspections are not the primary functions of disclosures. While aesthetic enhancements may attract buyers, disclosures focus specifically on underlying issues that could impact the value or safety of the property. Similarly, while price assurance is important in negotiations, disclosures deal with the condition and history of the property rather than pricing. Lastly, even with disclosures in place, inspections remain a recommended step in the buying process, as they provide a deeper evaluation of the property beyond what a seller might disclose.