What are Real Estate Disclosures and Why Are They Important?
Buying a home can feel like a never-ending process. It involves reviewing documents, signing tons of paperwork, and stressing from the day your offer is accepted until you receive your keys, but buying your dream home is absolutely worth it!
As much as I would like to explain the home-buying process step-by-step, it’s easier if I tackle one thing at a time. Today, I explain Real Estate Disclosures.
In the East Bay, before a house is put on the market, numerous documents are filled out that discuss everything the seller knows about the property. It is the responsibility of the seller to fill out these disclosures accurately with any material fact she’s aware of or should be aware of.
In the East Bay, it’s common for sellers to frontload all the disclosures so buyers can thoroughly review them before making an offer. It’s also common for sellers to perform inspections prior to putting their home on the market. This typically includes a home and pest inspection but can include additional inspections.
In addition, sellers must fill out disclosures specific to California that fully detail what the sellers know about the property. These are known as the “Transfer Disclosure Statement” (aka “TDS”) and “Seller Property Questionnaire” (known as “SPQ”). They must also provide a Natural Hazard Disclosure, which shows whether the property is in a flood, landslide, fire, earthquake, or liquefaction zone. In the East Bay, they will also include a Preliminary Title Report, demonstrating whether the property has any easements, liens, or taxes, among other things.
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As a seller, what should you disclose? The legal standard is any material fact that you know or should know about, so if you had a roof leak last year, do NOT just paint over it and hope the buyer doesn’t find out. That could definitely lead to legal recourse against you!
As a buyer, how do you read disclosures? Make sure you’re working with a seasoned Realtor who can help you understand what you’re reading and why it’s important.
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