The State of California requires a seller to complete a package, known as “Seller’s Disclosures,” to the buyer of their home prior to the transfer of title. A seller is legally responsible to be open and forthcoming about the condition of their property and knowledge about the neighborhood it is in. These disclosures are intended to inform a buyer about any known defects or issues pertaining to the subject property and surroundings so that they can make an informed decision about proceeding with the purchase of the home.
In a Residential Purchase Agreement for the sale of a Single-Family Residence, Condominium, Manufactured, or Mobile Home there is language that provides a timeframe for when the Seller is to deliver completed disclosures to their prospective Buyer. The standard is 7 days from the full execution of the purchase contract, however in today’s market we are seeing shorter escrow periods that lead to Buyers requesting disclosures in a shorter timeframe so that they have ample time to complete their due diligence.
Disclosures shall include any material facts or defects that relate to the property and its surrounding area that are important for a Buyer to know in order to determine if they want to purchase the home. Here is a list of some of the disclosures that you can expect to complete as a Seller or receive as a Buyer in a transaction:
Real Estate Transfer Disclosure (aka TDS)
One of the most important disclosures is the TDS. This disclosure offers specific details about the subject property such as kitchen appliances, alarm system, gates, garage, sewer/septic system, age and type of roof, gas supply, Heating & Air system, etc. The 3-page document continues with questions about defects, claims, known violations, room additions, damages, neighborhood noises or issues. For any question where a Seller checks the box “Yes” they have space below the section to provide an explanation. It is extremely crucial that the disclosures are fully completed to the best of the Seller’s knowledge and that every question is thoroughly answered.
Natural Hazards Report / Disclosure (aka NHD)
Ordered through a third party service, a NHD Report provides information about whether the property is in a special flood hazard area, high risk fire area or earthquake fault zone. A very dense report that can feel overwhelming, but is essential that as a Buyer you take the time to read it.
Water Heater and Smoke Detector Statement of Compliance – Seller is to verify and confirm that their property is in compliance with water heater being correctly strapped and smoke detectors installed and working in all necessary areas.
Other disclosures that you can expect to receive are disclosures that inform Buyers of a property being in a high wildfire area, of water-conserving plumbing fixtures, and carbon monoxide devices, if the property was built during years where lead-based paint was used, mold advisory, local area disclosures, and many more.
Working with an experienced and knowledgeable Broker will provide you as a Buyer with the peace of mind that they will ensure you receive all the information you need to make an informed decision to purchase a home. And as a Seller your Broker will work to safeguard that you have all of the forms and disclosures necessary so that you are in compliance when selling your home. Buying or Selling your home is a major deal, therefore you want to be sure that you do your due diligence and work with a team that will guide you through the process.