When selling a home, emotions can run high. There is the possibility of disagreement between parties - and legal disputes - especially given recent changes in the East Bay housing market. What are the best practices for keeping the sale of a home worry-free?

 

When it comes to keeping sellers protected, the safest bet is to disclose everything. What exactly is a real estate disclosure? Under California law, sellers have an obligation to disclose in writing all known material facts about a property. A fact is considered “material” if a reasonable person thinks it would affect the property's value. It has been said many times that if someone is wondering whether a fact is material, it is!

 

If the basement flooded in 1985, you must disclose it. You should also provide documentation as to how it was remedied. The intention, of course, is that potential buyers get a clear understanding of the condition of the property. Water intrusion in particular can occasionally reappear long after a problem is “fixed,” so potential buyers should be informed of these facts, even if the water didn’t show up during your time there.

 

Red Oak’s legal counsel said that 75 to 80 percent of the claims they see are related to non-disclosure issues and failure to recommend inspections. It’s crucial to be transparent, clear, candid, and thorough when completing that sizable file.

 

The seller’s most important disclosure document is the Transfer Disclosure Statement (TDS). Filling it out will probably be a trip down memory lane, since you’ll be prompted to reveal conditions that exist now as well as those that arose years ago. Your agent will review this form with you but can’t answer these questions on your behalf. There are certain exemptions to this requirement and your agent will advise you if that’s the case.

 

Sellers can expect to provide several more disclosures, addressing everything from lead paint to natural hazards. Many are required statewide, but some are city- or county-specific. Most East Bay cities have distinct regulations with their own policies. Once again, it’s important to have a local expert as your listing agent.

 

If you still have the documents from the purchase of your house, or any work you’ve had done along the way, you’ll need to provide those, too. Old inspection reports, surveys, estimates for repairs, bids, and permits, may all be useful to a potential buyer. It doesn’t matter how long ago you got them, they should be included.

 

Sellers can’t know everything about their property through disclosures and historic documentation. That’s why it’s a good idea to furnish current, high-quality inspection reports. It’s one more way to mitigate legal risk. Red Oak strongly recommends that home inspectors be insured for errors and omissions and be members of ASHI (an inspectors’ trade group).

 

It’s also important to provide a Structural Pest Control Report and a sewer lateral inspection and/or compliance certificate (different East Bay cities have different practices regarding this). Depending on the property, it may be useful to obtain reports that are specific to the foundation, roof and/or chimney. The title company will provide a Preliminary Title Report before they insure the title for the next buyer.

 

Your agent is your fiduciary. Though agents can’t give legal advice, they will make every effort to avoid and control risk while protecting your interests. The best outcome is one where both buyers and sellers have their needs and interests respected and competently met.

 

Red Oak pays careful attention to legal risks. The Transaction Management Team ensures compliance by overseeing every file and we uphold our high standards through continuing education and frequent legal updates offered by our legal counsel. Consistently using these best practices smooths the way for all of our clients. If you would like more information, reach out, we’d love to answer your questions.