Seller's Disclosures: What they mean....

Seller's Disclosures: What they mean....

Many times, when buyers request the disclosures for a Bay Area property, they are totally unprepared for what arrives in their InBox. Overwhelmed by the sheer volume of documents, they tend to just skim through the disclosures – and ask their realtor for highlights.
I’m here to tell honestly – and with love – that you need to read these documents. Don’t skim: just do your homework. Please.
So many transactions here are As-is and non-contingent. The disclosures that the seller provides are really the only way we can get away with that here in the Bay Area.

In other parts of the country, it is commonplace for the buyer to pay for inspections after a contract has been signed and before any contingencies are lifted. But things are faster paced – and more highly priced – than elsewhere. Here, the seller pays for the inspections and offers them upfront to any potential buyers.
Here’s my guide to tackling disclosure packets. Read the documents in this order:
  • The Coversheet
  • Property and pest inspections
  • Transfer Disclosure Statement and Seller Property Questionaire
  • Natural Hazard Disclosure Statement
  • Preliminary Title Rreport
  • Anything else the seller has included
Why do I suggest this order?
First, the coversheet usually gives you essential info about the offer process and any specific seller requests. Does she need a rentback? Do they prefer the California Association of Realtors contract?

The property and pest inspections will give you a clear picture of the condition of the home. You may not get past this point if there's something in those reports that are dealbreakers for you.

The TDS and SPQ will give you info about the seller’s experience living there: is there a barking dog next door? Did the roof leak in the winter of 2003? Is the drain in the primary bathroom tub slow?

The NHD gives you an idea of issues with the home’s physical location, which can impact insurance: is it in a high wildfire or flood zone? A liquification zone?

And finally, the preliminary title report will tell you if there are any easements, if the person selling the home actually owns it – don’t laugh; I did run across that in one transaction in San Mateo years ago—and if there are any special tax assessments.
 You should of course discuss all items with your realtor. She will be able to get further information from the listing agent if you need it and discuss the implications of the findings of each document.

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