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When buying a Southern California home, you deal with a lot of paperwork. But selling a home comes with paperwork, too. One very important form you need to fill out will be the Seller’s Disclosure form. This form is required as part of California Civil Code 1102 within seven days of an accepted purchase agreement. Sellers need to understand how this disclosure works and the importance of total transparency on this document in the sale process.
The Lowdown on the Seller’s Disclosure
What is a Seller’s Disclosure?
Also known as a property disclosure statement, a home disclosure, a real estate disclosure form, or (in California) the Transfer Disclosure Statement (or TDS), the seller’s disclosure is an important document in the home sale process. On this form, sellers provide answers to questions about the house’s condition, including current or former issues that the seller knows about. Typically these forms focus on roofing, basement and/or crawl spaces, plumbing, water/sewage, heating and cooling systems, drainage, electrical, HOA rules, and structural integrity.
What Does It Do?
This not only protects the buyer but also protects the seller. How? Well, let’s say that a few months after you sell your Southern California home, the buyer comes back and claims that they shelled out thousands of dollars for an issue they were never made aware of before they bought the home. If you disclosed it (as you should) before you sold it, this may protect you from paying for those issues. Also, in California, you must disclose whether your home resides in a natural hazard zone (subject to flash flooding, earthquakes, or wildfires). Even so, there is no way for sellers to know everything about a home, especially if the issues arose before they bought the home. And they are not legally held accountable for issues they were unaware of.
Honesty is Key
Real estate agents strongly encourage sellers to answer all questions with 100% honesty on the disclosure form. If you lie on the form, you may be held liable if a buyer proves you were aware of the problem and did not disclose it. That could cost you dearly. Also, half-truths could hurt you. For example, your pipes burst and caused a flood under your kitchen sink. From this flood, mold grew. You fixed the broken pipe, got rid of the mold, and replaced all of the drywall and cabinetry. Since it is no longer an issue, why worry the buyer by letting them know about it on the form? Well, if a leak happens again and the buyer learns from the plumber that there is evidence of it happening before, you might find yourself paying for their repairs…and then some. So, just answer the questions on the seller’s disclosure form as honestly as you can.
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
