Check out this animated video discusses what to look out for while preparing your disclosure documents when selling your property.
CLIENT: We have decided to sell our house! Our Realtor has asked us to fill out some disclosures. Can you assist me with preparing these?
ATTORNEY: Yes. Do you have records and receipts for your remodeling and repairs?
CLIENT: Yes. However, we have not written anything up. What should we do next?
ATTORNEY: Normally the listing agent would like you to get any inspections you need out of the way first. Additionally, he or she will ask you to complete the Transfer Disclosure Statement, which is mandatory. The “TDS” and the purchase forms used in the San Francisco Bay Area are published by either the California Association of Realtors or the Peninsula Regional Data Services.
CLIENT: Ok. That’s fine with me. Besides the contract and the TDS, what do I need to provide the buyer?
ATTORNEY: California law requires you to fill out and provide the Transfer Disclosure Statement. In addition to the TDS, many buyers would like the Seller’s Supplemental Checklist; however it is optional. I recommend that sellers use the supplemental disclosure to help them remember what repairs and property conditions that they should disclose to the buyer. After so many years of owning a home, it’s easy to forget all the little repairs you have made. Remember, you must disclose anything that would be material to the buyers. For example, if the window leaked this past winter and you repaired it in the summer but it hasn’t rained yet, you don’t know if it still leaks. Sellers often forget to disclose things they “fixed” which can lead to problems later.
CLIENT: I’ve only lived there 2 and a half years so there haven’t been very many changes beyond cosmetic changes.
ATTORNEY: Do you still have the original disclosures from when you bought the place?
CLIENT: I think so.
ATTORNEY: Great! You should provide those as well to the buyers. Don’t try to figure out what to leave out disclose more! Give the buyers everything you can remember and then let them decide if they need to do more investigation. Also, I always recommend that sellers give the buyers any repair receipts for two reasons. The buyer knows what was repaired and when. Further, if the buyer is really worried about the repair, they can call that vendor and find out more information and two, the buyer will be able to work with that vendor later when they own the house.
CLIENT: Are there any more disclosures I need to think about?
ATTORNEY: The contract will specify that you provide disclosures such as the Lead paint, whether the water heater is strapped down, the natural hazards report and more. In some cases these items can be ordered from a vendor for a “California” oriented disclosure package.
CLIENT: So when should we do all the disclosures?
ATTORNEY: As soon as possible! The contract requires you to do it five days after signing but each material disclosure gives the buyers a 3 day right of rescission. If you want to stay on time to a 30 day close of escrow, your listing agent would probably like to give the disclosures to anyone who is prepared to make an offer and shrink those timelines.
CLIENT: Perfect. Thanks!
If you have any questions or if you or someone you know may need legal assistance regarding such matters, feel free to contact Brewer Offord & Pedersen LLP at (650) 327-2900. Visit us on the web at www.BrewerFirm.com
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