February 17th
Uncategorized

Are You Serious?

Upon seeing an especially large disclosure on a Tenancy-In-Common (TIC) I found myself thinking if disclosures could eat I would imagine that they lived on Big Macs, because they keep growing in size as time passes. Realtors all tell their sellers: Disclose everything you know about your home. Detailed seller disclosure forms plus updated and changing laws have […]


Upon seeing an especially large disclosure on a Tenancy-In-Common (TIC) I found myself thinking if disclosures could eat I would imagine that they lived on Big Macs, because they keep growing in size as time passes. Realtors all tell their sellers: Disclose everything you know about your home. Detailed seller disclosure forms plus updated and changing laws have gradually increased the size of the disclosure package.

First: What is a disclosure package? The short answer is this is a group of documents completed by the seller that provides the buyer with all of the information the seller knows about the property. Looking at it in pieces makes it easier to understand. Included in the disclosure is information provided by the seller, the agents, the title company and state and local governments. Different counties have different forms. Do not expect all disclosures to be exactly alike.

If you are thinking about buying or selling a property you will come in contact with a real estate disclosure package and will take one look and ask, “Are you serious?”

Sellers will ask the “Are you serious?” question when asked to fill out the required questionnaires that need to be included in a disclosure package. The seller also must pay for an Earthquake Hazard Report, JCP Report, 3R public records report documenting building permits and required inspections related to energy and water conservation laws. TICs, condo’s and stock cooperative require additional documentation. Added to this the seller’s agent may recommend a pest inspection.

By the time all of these reports and questionnaires are put together the disclosure package on a single-family home will be about 100 pages, and as much as 300 pages on a TIC.  TIC’s, condo and stock cooperatives must include all legal documents and meeting minutes for one year prior to the listing date. If new information is available while marketing the property this must be added to the disclosure.

The first time a buyer receives a disclosure package, even if they have been warned to expect more information than they can imagine, so they often ask, “Are you serious?” This is usually followed by, “You want me to read all of this?” Well, yes I do. Buying a home for almost everyone is the biggest financial decision they will make in their life time. Even a new home may have some issues and it is important to understand what you are buying, the work that has been done on the home and what work or maintenance may be necessary in the future. Home ownership always has a surprise of two for a new owner, but hopefully these are minimal when a disclosure package is complete and the buyer reads it carefully.

Sellers are the lucky ones. They only need to fill out the forms once, pay for the reports and they are home free. Buyers unless they are extraordinarily lucky must read two or three disclosures or more before they decide to make an offer on a home and successfully negotiate a deal. The good news for buyers is that much of the information in a disclosure is boiler plate and after reading the first one buyers quickly learn what to look for in a disclosure and to spot red flags.

If you are a buyer and worried that you won’t have time to read and understand a disclosure package before you make an offer—why not take a test run? Ask your agent for a sample disclosure package for you to review. This will go a long way to helping you get ready for the main event when you make an offer on the home you want to call your own.

In a perfect world, when submitting an offer, the buyers will include a disclosure package that is signed off. This means they have read it and don’t have further questions. What if you want to make an offer, but don’t have time to review a disclosure, or the agent does not have the complete disclosure information available? There is no need to rush through reading and signing off on a disclosure package at the risk of missing important information. Both the San Francisco Association of Realtors (SFAR) purchase contract and the California Association of Realtors (CAR) purchase agreement include language giving the buyer time to review and approve the disclosure once the contract is ratified.

There is no way to put the disclosure packages on a diet. Less is not more when it comes to disclosures. Take a deep breath when your agent hands you or emails you a disclosure. Set aside a few hours to read through it with your high lighter in hand and some sticky notes to mark pages and write down questions. When you are done ask your agent to explain the real estate jargon and answer your questions. Before you know it you will be ready to write your offer and tell friends all about flood zones, liquefaction and the difference between dry rot, termite and wood boring beetle damage.

Carole Isaacs is a REALTOR® with McGuire Real Estate—offices in Noe ValleyMarinaSOMA—a photographer and lover of all things San Francisco. Visit the San Francisco City Living Facebook Page for more info; for questions please email callingcarole@gmail.com or call 415.608.1267.

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