Many real estate agents fail to consider the impact of non-disclosure states on their business. These states not only make it difficult to buy and sell a property but also make it hard for homeowners to get to know their property’s full value.
All the states in the U.S. can be classified into the following three categories:
- Full-Disclosure: These U.S. states allow you to disclose sale prices publicly. The list of full disclosure states in the U.S. includes Virginia, Vermont, Wisconsin, West Virginia, Washington, South Dakota, South Carolina, Pennsylvania, Oregon, Ohio, North Dakota, New York, New Jersey, New Hampshire, Nebraska, Minnesota, Michigan, Massachusetts, Maryland, Maine, Kentucky, Iowa, Indiana, Illinois, Hawaii, Georgia, Florida, Delaware, Connecticut, Colorado, California, and Arizona.
- Non-Disclosure: In contrast, non-disclosure states do not allow your sale transactions to be in the records. They can only be shown to local assessors and assessment officials. Non-disclosure states include Wyoming, Utah, Texas, New Mexico, Montana, Missouri, Mississippi, Kansas, Idaho, and Alaska.
- Neither Non- or Full Disclosure: These states are somewhere in-between where there is a certain level of disclosure. Mostly, these states do not have any definite non-disclosure laws. Sale records will only be available to the public if they have been submitted by the seller. These states include Tennessee, Rhode Island, Oklahoma, North Carolina, Nevada, Louisiana, Arkansas, and Alabama.
Why Non-Disclosure Laws Exist
The main reason why a lot of cities and states have non-disclosure laws is to ensure security and privacy. However, this can be a huge disadvantage for the real estate buyer and investor, thereby negatively impacting the seller. Sellers are allowed to keep all the specific information regarding a property private unless they get contacted by potential buyers. If you have tried to look up properties in various states, you might have noticed that the sale prices of certain properties are not available to the public.
Generally, non-disclosure states do not necessarily require property owners to not disclose the price of their property. It is upon the owner of the property whether they want to submit this information to governing entities or not. Moreover, even if a governing entity has access to sale prices, they cannot disclose them to anyone unless the owner has made a request to disclose them to a potential client.
How Real Estate Investors Handle Non-Disclosure States
When it comes to financial decisions and planning, the sale price of a property you are interested in is a crucial element. It can be very inconvenient to go through properties without disclosed prices as it makes it hard to evaluate whether you are getting a good or a bad deal. Fortunately, investors and property buyers can still get an idea of a property’s price by going through MLS (Multiple Listing Services). MLS is essentially a database which lists properties that are on sale within every state.
However, scanning through the information of a particular region requires you pay a yearly fee and to have a license from that respective state. Therefore, it would be better to work with a real estate agent with MLS access.
Real estate disclosure laws allow property buyers and real estate investors to be aware of all the details of a property. Knowing the sale price allows you to evaluate your purchase’s value. It is crucial for property buyers to ensure they inspect every property thoroughly before making a purchase and are educated about how the inspection process differs for every state.