Important Real Estate Disclosure Facts.

Important Real Estate Disclosure Facts.

Whether you are buying a home “or” selling a home, real estate disclosures are an essential part of the real estate transaction. It is standard practice for the seller to do everything possible to show the property at its best. And 9 out of ten times the seller gets the home in selling shape to make sure the home looks its best. Although, sometimes the seller makes the home look great in hopes of hiding potential defects/flaws.

The good news, especially for potential home buyers – in most areas around the country, sellers (and their agents) are bound to document (in the form of disclosures and reports) all know defects to potential home buyers. But even though sellers (and their agents) are required to disclose any known defects, sometimes they don’t always play by the rules.

Whether you’re thinking about purchasing a home of putting your home on the market, here are some important real estate disclosure facts you need to be aware of and know.

What are real estate disclosures? Real estate disclosures come in many different forms and vary from state to state. The main purpose of real estate disclosures is two-fold. Real estate disclosures are designed to reveal anything that can negatively impact the usefulness, enjoyment, and value of the home. It also serves as protection for all parties involved in the transaction. Real estate disclosures protect the seller (and their agent) from future legal action “as well as” protect the buyer’s agent from any future legal action and help the buyer learn as much as possible about the home, so there are no surprises after escrow closes.

How does the disclosure process work? As mentioned, the disclosure laws vary from state to state and in some cases city to city county to county. In California, we have some of the most rigorous disclosure requirements.

The real estate disclosure in California requires the seller (and their agent) fill out and sign a number of real disclosures. Local and State Transfer Disclosure Statements, Natural Hazzard Disclosure Statement, Megan’s Law Disclosure, Lead Base Paint Disclosure Statement, and even Advisories about Market Conditions, all improvements, upgrades, renovations, (and or) any work completed that’s not permitted.

Other real estate disclosures deal with neighborhood annoyances, the existence of pets, defects or malfunctions with system appliances, termite problems, and even if there are any history of property line disputes. There are even disclosures to let the buyer know if the seller is involved in bankruptcy proceedings (and or) any liens on the property, and so on.

It is important to note – depending on where you live; the seller (and possibly their agent) is on the hook for up to 10 years for what they disclose “as well as” failing to disclose. I always recommend sellers should err on the side of caution. I explain that “if” they try and hide something, it can come back to bite them in the form of costly litigation.

When is the seller obligated to give signed disclosures to the buyer? Typically, once the seller has accepted their offer, the seller has several days to provide the disclosure statements to the buyer. The reason for the quick delivery is to allow the buyer plenty of time to review all disclosures. If “for some reason” the buyer doesn’t like what they see, the buyer will be able to back out of the deal without penalty if they so desire.

It is very important for the buyer to review all real estate disclosure very carefully and understand them before they sign off on all disclosures and reports. The end goal of the real estate disclosure and reports is to give the buyer a sense comfort and peace of mind in their home buying experience as well as protection for all parties involved.