California Transfer Disclosure Statement Mistakes Made by Sellers

Follow your agent’s tips to fill out the Transfer Disclosure Statement online.

Completing the California Transfer Disclosure Statement can be troublesome for many sellers in Sacramento. Although these documents are common place for most real estate professionals, we need to remember our sellers are not licensed in real estate. They don’t understand our lingo and “shop talk” has no place in Sacramento real estate. We need to make the completion of seller disclosures simple and easy for our clients.

I always tell my clients to call me if they have questions when completing the Transfer Disclosure Statement. We have only 7 days to deliver them to the buyer after contract acceptance. They don’t always call. Maybe it’s late at night when they get around to viewing the paperwork online. They just want to finish it and be done. Therefore, sellers might skim through the paperwork and not completely read the questions.

Common mistakes routinely made by sellers when completing the Transfer Disclosure Statement

On page one, Section I, Coordination With Other Disclosure Forms, there is a box for adding reports made pursuant to the contract. YES, check that box. The buyer will do a home inspection and possibly pest or roof or chimney or sewer, a whole slew of inspections.

On page one, Section II, Sellers Information, there is a box to check as to whether the seller is an occupant or not an occupant. Basically, do you live there or not? If the seller doesn’t live in the house anymore, the seller is not an occupant. Easy answer, but many sellers don’t know.

Also on page one are the items included in the sale of the home and descriptions. Here are hard-to-answer questions:

What is a 220 volt? It’s an enormous receptacle with 3 prongs that your dryer plugs into.

What is an Exhaust Fan? In the ceiling, generally, in laundry rooms, bathrooms and in your range hood in the kitchen. It sucks moisture out.

Number of Remote Controls? This is the device that opens your garage door. If you note 2 remotes, you better have two remotes to hand over to the buyer at closing. If you’re unsure, put zero. Be safe.

What is a Gas Starter? This is a key on the wall that starts a gas fireplace. If you have a wood burning fireplace, you do not have a gas starter.

Page 2 Part C of the Transfer Disclosure Statement, more common mistakes when sellers check No and should check YES:

Item #2) This is almost always YES. If for no other reason than you have a fence, usually in the back yard, that is shared and separates a neighboring property from yours.

Item #12) CC&Rs. Almost every home in Sacramento has CC&Rs. These are covenants, conditions and restrictions recorded in the public records around the time the home was built. The preliminary title report will tell you whether there are CC&Rs recorded against the property. Your title insurance policy when you bought the home will disclosure CC&Rs in Schedule B and except them from coverage.

Item #13 and #14 concern properties located within a Homeowner’s Association. If a seller pays an HOA fee to an HOA, then an HOA has certain authority. Check YES. If there are common areas shared with neighbors in an HOA the answer to #14 is YES as well.

At the bottom of the second page, if you checked YES to any of the 16 questions, you need to explain WHY you answered in the affirmative. Be brief. For example, you might say: #2 Fences. And it explains it all in one word.

Risk management says if you’re gonna get into trouble with the buyer, it could relate to the Transfer Disclosure Statement. Unhappy buyers who believe a seller lied to them are the worst kind to face in court. Don’t make these common mistakes when completing the TDS. If you need assistance or have a question, call your Sacramento Realtor for guidance. We are here for you.