Guiding Sellers to Correctly Complete Seller Disclosures

Talk about dumb and dumber regarding seller disclosures and an irate buyer. I don’t know what’s worse — that a buyer could think that a real estate agent would be so dumb as to complete a set of disclosures on behalf of the agent’s seller or that the buyer could believe that an agent could be so much dumber as to complete them incorrectly. On top of which, it’s against the law for an agent to prepare a seller disclosure. But that’s what a buyer accused a Sacramento listing agent of doing without so much as batting an eyelash. That’s enough to make one feel incredibly empathetic for the poor buyer’s agent who probably has to put up with much worse crap from the guy.

When I take a listing, I discuss disclosures in depth with my clients. We talk about material facts and whether something small and insignificant needs to be disclosed. Most of the time, the answer is yes when you wonder if it needs to be disclosed — unless it doesn’t apply at all, and I’ve seen a few of those. The seller might ask about a fire that happened years ago on the other side of town, something that doesn’t affect his property. But if something affects your property in any form, shape or manner, then disclose it.

I once made a seller so paranoid about disclosing that he composed a small horror novel and delivered it to me — pages upon pages of stuff that might happen, ending with the foundation could collapse and the walls could cave in. He was just thinking about stuff that could happen, which wasn’t at all what I meant when I told him to disclose. Now I was stuck with that disclosure because I couldn’t send it back or pretend I never received it. I was required to give it to the buyer.

You might wonder why, why would I have to do such a thing when I represent the seller? I have to do it because I am required to disclose everything I receive. I must also treat both sides honestly. I can’t take it upon myself to choose which documents the buyer sees and what the buyer doesn’t see. The buyer sees everything.

If a neighbor calls to say his fence is on my seller’s property, I disclose it to the buyer. You’d be amazed at how many neighbors are defiant about such matters and wrongly believe that agents care about their opinions. I don’t disclose it as a fact because I don’t know where the property lines fall, but I do tell the buyer the neighbor says the property lines encroach. It’s up to the buyer to investigate or otherwise perform due diligence.

Still, guiding sellers to complete disclosures correctly is sometimes a little bit like herding cats. If you have a question about a disclosure, be sure to ask your agent for help. That’s what we are here for. Sellers tend to fret far more about the disclosures than buyers. Except for that one guy who is probably making his buyer’s agent’s life a living hell.