In most cases, Sellers Disclosures are required by law. But there are exceptions. Builders who provide a warranty don’t have to offer a disclosure. Neither do sellers of estates where the owner has died and the heirs did not live in the house.
A divorcing couple may give a disclosure where one owner does not sign because he or she hasn't lived in the house for a while and cannot vouch for the present condition (although they may know of past problems). Moreover, disclosures do not cover everything you might care about.
For me, the seller’s disclosure is a list of things my buyer’s inspector needs to examine closely. I judge sellers by the attention paid to the form. Rather than a red flag, a thorough disclosure is an indication of an honest seller. If it's not completely filled out, I require that it be done during the inspection period.
Interestingly, the Pennsylvania statute requiring a disclosure provides a less comprehensive form than the one used by most Realtors. So most buyers actually get an expanded form of disclosure. Seller's agents are also required to disclose to buyers material defects they know of which their clients failed to disclose.
Because the standard Agreement of Sale “erases” any claims for problems after the house is bought, the Sellers Disclosure is arguably the sole recourse available to a buyer who runs into problems after closing. The problems must be “material” or pose a “health or safety risk” — so not everything is covered. And sellers must have known and lied about the issue on the form in order for a buyer to collect any money. In fact, Sellers Disclosures tend to protect sellers more than the buyers, as sellers get an opportunity to put the buyer on notice concerning a whole list of issues.
I'm all about careful analysis, but requesting to see a detailed list of a home’s issues before you even walk through the door might deter you from seeing a home that’s perfect for you, simply because the sellers may be overly cautious in filling out the form. Usually, I get a seller’s disclosure once my clients have seen the home and may make an offer.
Remember, no house is perfect, and no seller’s disclosure guarantees that it will be. The goal is to minimize the risk. Use an agent with a good “eye”, read the form carefully, ask questions, and have your inspector check past problems to be sure they've been corrected.