Carol Carnevale • DRE# 00946687 • 650.465.5958
Nicole Aron • DRE# 00952657 • 650.740.7954
When selling residential real estate it is important to understand the significance of the required disclosures.
Unless an exemption applies, the law requires that sellers of a 1-4 family residential property disclose all material facts that could affect the value or desirability of the property, their awareness of remodeling/significant repairs done to their property without a building permit or not in compliance with building code, and any zoning violations. Additionally any past disclosures, inspection reports, bids, correspondence, contracts and other construction-related documents should be included as part of properly disclosing.
In our local area, the standard of care is that sellers provide a complete disclosure packet to prospective buyers so that they have an opportunity to gain additional knowledge about the home prior to making an offer.
A typical disclosure packet usually includes the following elements:
When a homeowner decides to list their home for sale with a Realtor, they will be provided with the required forms and a good real estate practitioner will spend time with the sellers explaining the significance of these forms.
The Real Estate Transfer Disclosure Statement (mandated by law) and the Supplemental Seller Checklist are forms providing the method by which sellers can disclose what they know about the property. These forms will require time and thought to ensure that they are complete with all the boxes checked, blanks filled in and explanations as needed. Additionally, sellers are encouraged to also include supporting documentation as noted above.
One area of confusion concerns the disclosure of a past condition at the property that sellers believe has been corrected. The complete way to disclose is to reference the problem and what was done to correct it and to provide related documentation. For instance, if the roof leaked and a new roof was installed, it would be appropriate to state both the problem and the “fix”, and to provide copies of the bids, the contract with the roofer and the permit.
Once a seller has completed the disclosures, it is the listing agent’s responsibility to review the forms for completeness and to also do a “reasonably competent and diligent visual inspection of the accessible areas of the property”. At this point, assuming that all the blanks and boxes have been checked, the form is considered “complete” and ready for delivery to the buyer/buyer’s agent.
Buyers are encouraged to thoroughly read the sellers’ disclosures and to independently investigate all aspects of the property by hiring qualified professionals and to ask questions about items that are not clear.
Local real estate agents recognize the importance of properly completed disclosures and how they can impact the strength of a buyer’s offer. When a buyer’s agent has performed and written a visual inspection of the property the disclosure process is considered “complete”, and when buyers take the time to read and acknowledge the sellers’ disclosures, and these documents are delivered with their offer, they in effect waive a 3-day rescission period. In a fast moving market, attention to this detail improves the strength of an offer and is one way to stand out positively in a multiple offer situation.