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Why Agents Can Not Fill Out Real Estate Disclosures For Sellers
Real estate agents are not allowed to complete seller real estate disclosures.
Even in today’s world I still need to explain why I cannot complete the California real estate disclosures for my clients. Because they don’t know the reason. In fact, some Sacramento Realtors don’t know, either. Not everybody knows that when I was first licensed by the state of California to sell real estate in the 1970s, I had also enrolled in law school. I am intrigued by law still; it’s fascinating. Although accepted into law school, I did not go. As I sat in the conference room filling out my paperwork, a law student stopped by, poked in his head and hissed, “Don’t do it.”
True story. Although that wasn’t the reason I decided against a second career in law. Basically, I couldn’t live on the salary of a lawyer, and that plan was simply to supplement my real estate income by doing legal things for my real estate clients like divorces, wills and estate planning. Turned out I didn’t need supplementation, so I dropped out. But it doesn’t mean I don’t have respect for the profession because I do. I pay attention to the new lawsuits that pop up in real estate, and many cases focus on real estate disclosures. A properly prepared real estate disclosure can be the catalyst for a dismissal.
I am also cognizant of the fact that I am not a lawyer. Nope, didn’t finish law school, didn’t get a law degree and I am not licensed to practice law. Completing real estate disclosures is not a real estate function of a Sacramento Realtor. Can’t so much as touch my pen to that paper. Even when I am tempted to speed things up or make the process easier for all of us. And an agent can be tempted when she is working with an elderly client who might have difficulty reading or writing or maybe struggles with DocuSign.
It is why I invested 2 hours yesterday to verbally “walk” a client, question by question, through completing the forms over the phone. This client recently sold a home in the Bay area. His Bay area agent had filled out the disclosures for him, he insisted (which probably did happen, not all agents are on the ball). Well, if anything, this client will remember that this Sacramento listing agent did not, LOL. Although, I spent several hours explaining what the questions were, why he needed to answer them, and we discussed each question over the phone. I am hopeful he has a sense of relief now that he has completed his real estate disclosures. It is his house. He is the individual who needs to disclose.
This will probably be a seller who will never get sued. Lots of sellers are never served with a summons, even in our litigation-prone world of real estate in California. Non-disclosure or inappropriate real estate disclosures are often the source. If you eliminate that from the equation, odds are in a seller’s favor. This does not mean that I can assist another seller through his own set of real estate disclosures if I do not represent that seller. THAT, I’m afraid, would be practicing law.
Reasons to Go the Extra Mile for California Real Estate Disclosures
Home sellers are required to disclose defects through the California real estate disclosures.
Most home sellers with a lick of common sense moan about California real estate disclosures. The home sellers’ state and federal-mandated disclosures are a pain to fill out, but the ramifications of incomplete or inaccurate disclosures are potentially enormous. We had a closing temporarily held up yesterday when the underwriter suddenly requested a more thorough explanation, which I was able to immediately supply and avert the crisis, concerning a note the seller included on a loan document.
As part of my full-service listing job duties, I try to prepare my sellers prior to completing disclosures. I offer to review the disclosures with my sellers as they complete them; I guide, although I do not write the responses. One of my clients told me yesterday that I must have been a trial lawyer in another life. I hear that a lot but I am not a lawyer, I am a Sacramento REALTOR®. Further, like Joni Mitchell, I see things from both sides. Take the case of a home in which the seller has not lived, briefly toured when she initially bought it and now, some almost 10 years later, is selling. That seller still needs to disclose everything she knows or should know, which can often be nebulous, about that rental home.
This seller had the ability to obtain a list of repairs from the property manager to give to the buyers as part of her California real estate disclosures, so we obtained that list for the buyer. Because she made a brief mention about former repairs in a loan document, we also had to send the lender a copy of that list. If she had signed closing documents in an escrow office, that blip would not have happened but she signed with a mobile signer out-of-state. I had her so ingrained to disclose, disclose, that she wrote it right on a lender document! Fortunately, I had that repair list in my files and sent it directly to escrow.
It’s often not so much what you say in the California real estate disclosures as how you say it. You can tell buyers anything, and they will still buy that home. It’s when you don’t disclose or when future problems pop up down the road that all holy hell breaks loose. Take that poor guy from San Francisco who had the worst luck ever. First, the city red-tagged the home on his birthday. The next day, while the guy was still in Ohio at his father’s funeral, city workers demolished his $2.1 million cliff-side home with panoramic ocean views, deeming it suddenly unsafe.
The culprit was most likely either groundwater or an 8-inch water line that broke or both. How would you like to come home and find your house gone? Especially after such a personal tragedy? I predict lawyers will probably find plenty of plaintiffs. If you’d like a top producer Realtor to represent you, please call Elizabeth Weintraub at 916.233.6759.
What Are California Home Sellers Required to Tell a Buyer?
When selling a home in Sacramento, many home sellers have no idea what they are required to tell a buyer and what kinds of disclosures for selling California real estate they must provide. A crucial service that real estate agents provide for home sellers as a Sacramento listing agent is to explain to clients how to complete the real estate disclosures and related paperwork. Because of all of the lawsuits, it’s not easy to complete the paperwork. The lawyers make the paperwork very difficult for a regular homeowner.
For example, in the Transfer Disclosure Statement, a question that is often overlooked because it does not have a number next to it and the type size is small is whether the seller lives there. It asks: Seller is BOX [or] is not BOX occupying the property. A seller called me yesterday to ask if she was an occupant because she did not know the answer to that question, yet she is a reasonably intelligent woman. It’s possible that she was at somebody else’s house when she was completing the TDS and perhaps interpreted the question literally. Dunno.
Why can’t the form ask if the property is a rental or a residence? Or, to make it simpler, do you live in this home? Or, do you live in this home 12 months out of the year? Or, have you ever rented your home? Is your home rented now?
This is just the first question. What else are California home sellers required to tell buyers? You’d be amazed.
I have no idea how sellers who represent themselves as a For Sale by Owner manage to complete their real estate disclosures without competent direction. These are the documents that after escrow closes the buyer may choose to sue the seller about, to go to court over. The one thing that is often standing between the seller and a judgment are the seller disclosures. They have no clue what are California home sellers required to tell buyers.
It’s not so much what a seller says sometimes as how the seller says it. A Sacramento real estate agent, while she cannot complete the form for a seller nor give a seller legal advice, she can certainly offer guidance. Let’s not even talk about the four-page Seller Property Questionnaire at this point and its question about pre-1978 that nobody but an agent understands.
Home sellers need to be truthful and honest and answer each and every question. They should keep nothing from the buyer. If you have a question about your real estate disclosures, call your Sacramento real estate agent before answering.
