Tuesday, May 28, 2013

Why review a seller disclosure before making an offer?

Performing due diligence is a home buyer's responsibility and a major part of the process relies on information the seller provides prospective buyers.

A key piece of that information is included in the Seller's Real Property Disclosure Statement provided by most Florida licensed real estate agents.  Other information provided includes things like association disclosures,  rules/restrictions, and financial statements of the association.

When I work with buyers the disclosure is requested and reviewed prior to any purchase offer is submitted. 

Although the form is about five pages long it is not a complex task to complete.  These disclosures are prepared by the seller(s) and their real estate agent should not get involved in the completion of the form in any way.  As I always tell sellers - include everything yo know that you would like to know if you were the buyer.  Do not stick your head in the sand....disclose, disclose, disclose.

This form is a simple questionnaire about the subject property.  What are some of the items discussed?
  • any claims and assessments 
  • deed/Homeowner's Association restrictions?
  • property items like surveys conducted, boundary disputes, fences, drainage problems, sinkholes, soil movement, flood zone, etc.
  •  potential environmental and zoning issues such as hazards and  any proposed changes that may affect future value, etc.
  • termite and wood destroying organism issues (current or past), 
  • structural and major systems issues including roof related items, plumbing, electrical, heating and air conditioning,
  • any other matters that may affect the value of the property.
This list covers a lot of areas and is not all inclusive.  With disclosures as background information, buyers should go further including the home inspection, termite inspection, document review and more.

The time allowed for performing due diligence is identified in the contract.  Buyers need to move forward as quickly as possible.  Deadlines identified in the contract are firm unless modified by buyer and seller.