Disclosures - What They Are and Why You Need Them
In the fast-paced San Francisco real estate market, preparing complete disclosures is one of the keys to clean or non-contingent offers and a smooth transaction. Sellers are required to provide disclosures prior to closing the transaction. And if disclosures are provided upfront, buyers can carefully review them to understand the property’s condition and value.
Although the sheer volume of documents can feel a bit overwhelming, every one of them is there for a reason; most are required by state or local laws. My extensive experience and clear communication will guide you through the process and protect your interests every step of the way.
Ultimately, putting care and effort into disclosures helps to instill buyer confidence in your property and can generate more buyer interest. It’s more advantageous for a seller to disclose a $10,000 problem before a buyer writes an offer. If buyers conduct their own due diligence and uncover any new issues, it can be to their advantage in negotiating a new purchase price.
In this series I’ll go over the main disclosures you can expect to see and provide details about why they are important to a successful real estate transaction.
Part 1 - Seller Disclosures
Seller disclosures inform potential buyers of everything that a seller knows about their property. As such, they provide an opportunity to share the positive attributes of a home. Conversely, seller disclosures may include information that can affect a property’s desirability or value.
Bottom line, your willingness and obligation to disclose and provide absolute transparency will go a long way towards encouraging buyer interest, and confidence, in your property. When in doubt, disclose!
Required Seller Disclosures in San Francisco
The three basic seller disclosures required in San Francisco are:
- San Francisco Seller Disclosure
- California Real Estate Transfer Disclosure Statement
- Residential Earthquake Disclosure – only applies to certain properties and is not required for every sale
What Types of Information Are in Seller Disclosures?
Seller disclosures include legal/statutory issues, concerns impacting the neighborhood, the current and past condition of the property itself, any repairs made to the home, unwarranted space, what appliances will be transferred with ownership, and much, much more.
These disclosures must be as complete and thorough as possible to avoid the prospect of any future disputes or liability.
Go With What You Know
It’s important to note that these disclosures are to be completed “to the best of your knowledge.” Many of the questions on these forms are straightforward, and most sellers will know the answers to them right away.
I always tell my seller clients to share everything that they know about the property. But, in many cases, they don’t know the answer, and that is to be expected. Choosing “Unknown” or “Do Not Know” is a perfectly acceptable answer, and definitely preferable to taking a guess!
Stick To The Facts
Also keep in mind that if you need to provide details or explain anything about the condition of the property, you should avoid using subjective terms and adjectives. One person’s “minor” crack in a foundation may be another person’s “major” problem. Above all, be clear and precise, without attempting to qualify or diagnose any issues.
The Right Guidance Matters
With thorough guidance and attention to detail, I help sellers provide information upfront in a clear and concise manner. And helping my buyer clients review disclosures instills confidence in their decision to make an offer.
While a real estate transaction and negotiation can be a complicated process, starting out with truth leads to trust and a better outcome for everyone.
Next in the Series:
Part 2 – Reports
