Maryland Home Improvement PSI Practice Exam

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In the context of real estate, what is a property disclosure?

A document stating the seller's knowledge of the property's condition.
A legal agreement between buyer and seller outlining expectations.
A report prepared by a third-party inspector.
An estimate of the property's market value.

The correct answer is: A document stating the seller's knowledge of the property's condition.

A property disclosure is a critical document in real estate transactions that provides important information about the condition of a property from the seller's perspective. It outlines the seller's knowledge regarding any defects, issues, or required repairs that may exist within the property. The main purpose of this disclosure is to inform potential buyers about the current state of the property, helping them make informed decisions before finalizing the purchase. This document typically includes details related to structural issues, environmental hazards, and other factors that could impact the property's value or safety. Properly completed, the disclosure helps protect both parties involved in the transaction by promoting transparency and potentially reducing the risk of disputes after the sale. Understanding the condition of the property can lead to better negotiations and appropriate assignment of responsibilities in repairs or price adjustments.