You have decided it’s time to sell, or it’s time to buy, and like a pile of illegible bricks, the paperwork is thrown at you. You may ask yourself, why on Earth do I need to sign all of this paperwork? Short answer – it saves your butt.
Now, among the seemingly countless disclosures or reports you may receive there could be a lot of vital information buried ( so it may seem) amongst the minutia of documents. Let me give you some hypothetical examples.
Suppose you are selling a stunning craftsman home with acreage on a beautiful sunny lot, you’ve hired the best, got impeccable marketing and exposure, and it has resulted in a ton of interest. After some negotiation, you’re in contract. YAY! Low and behold, you live within an HOA. You haven’t looked at your documents since you purchased the home 20 years ago. In little fine writing, it says “ No Horses”. No big deal right? Wrong, the person who wants to buy it is only looking for a property that can sustain horses. Buyer backs out, and your days on market racks up and interest slows to a crawl.
Now suppose you are the BUYER in that example. You have been given what feels like a million documents to review and sign. You figure, “hey,” they are all boilerplate and you don’t read them. You don’t figure that bit out about your beloved horses until you have installed your stables and the neighbors politely inform you that it’s no-go. So, congratulations, you’ve ended up buying yourself a great big waste of money. This could have been completely avoided by spending some time actually looking over and reviewing the documents with your agent.
Or, suppose somewhere in the mix you find an environmental hazard disclosure, probably just generic info, right? Well, in that disclosure you see the box checked “yes” under “located in a floodplain.” You say to yourself, “hey, no big deal, it never rains in California any way!” Well this may or may not make a HUGE difference in the amount of insurance you have to pay or the insurance you can even obtain. Your due diligence period is for your protection, don’t phone it in and go through the motions.
Suppose the home inspection report mentions Earth to wood contact along the side of the home where a hillside backs up directly to the structure ( some what common in the mountains), and mentions pooling water under the home. Although it may be tempting to just skim over this, it is important to read and be aware of. What is causing the pooling and what could it mean to the structure over time? What would be the remedy and what would it cost? If you don’t find the answer to those questions now, you could potentially be in for a nasty surprise down the line.
Now suppose you were the seller in that instance, you decided not to move forward with upfront inspections against your agent’s advice, and forgot to mention in your seller disclosures that every winter there is water intrusion in the bedrooms. You decide it’s not an important detail, keep it to yourself and just paint over the water stains. Shortly down the line, the new owners discover this annual presence, tear out the damaged debris and discover this has been an ongoing issue that was never disclosed, and is going to cost a pretty penny to remedy. I wouldn’t want to be on the receiving end of that phone call, that I can say for sure.
What do you do if you know a well is the water source, and that it is shared, but there is no written agreement? What if you have always parked on your neighbor’s property, it has never been an issue, and now it’s time to sell, do you just assume the new buyer will be able to park there too? Can you advertise that parking? Do you live on a private road? Is there any type of agreement or is it informal? That beautiful front r
oom that was converted from a front porch without permits, is that important to tell? It is great construction and has been that way for years…
So many times I have to tell seller clients that disclosure is what protects them and the buyers simultaneously. If you don’t read, or don’t disclose, odds are there is going to be an unhappy camper in the end.
Kaelin, your passionate Realtor® sharing her experiences