If you’re shopping for a house in Oakland, Berkeley, or much of the East Bay, you’ve probably looked at houses that come with a giant binder or packet of information full of all sorts of things you may or may not want to know. This disclosure packet is typically serving three roles: seller’s duty to disclosure, agent’s disclosure and disclaimers, and upfront reports and inspections.
Seller’s Duty to Disclose
First, the disclosure packet is meant to satisfy the seller’s statutory duty to disclose material facts affecting the property. This is usually done through three official forms, the Transfer Disclosure Statement (TDS), Seller Property Questionnaire (SPQ), and Lead-based Paint Disclosure (FLD), along with accompanying documentation that may include inspection reports, invoices, insurance claims, and more.
These forms are meant to extract pertinent information related to the property that the seller knows or should know. Some examples include:
- Was there a death on the property in the last 3 years?
- Is the property located in an HOA or other common interest development
- Is anything broken?
- Is there or has there been any water intrusion into the property?
- Do any pets live on the property?
Agent’s Disclosure and Disclaimers
The seller’s real estate agent has a duty to disclose facts known to him/her as well as complete a visual inspection of the property. This report is called the Agent Visual Inspection Disclosure (AVID). The seller’s agent may also include a number of disclaimers and advisories for buyers to read and acknowledge.
Reports for upfront information on condition
In our hot seller’s market in Oakland and beyond, sellers are often providing natural hazard reports, home inspections, and wood destroying pests and organisms inspections to buyers upfront. Based on the contents of the reports, the seller may choose to also order and provide roof reports, foundation reports, sewer reports, and more. This provides a more complete picture of the property’s condition prior to any prospective buyer making an offer. The purpose of providing these reports is to make it more likely to receive non-contingent offers and eliminate renegotiating after getting into contract with a buyer.
So which part is important?
All of it! While it’s full of great information, a large swath will be nearly identical on each property you view. The places most buyers choose to focus their time on are seller disclosures, agent visual inspection, and any reports that have been provided.