What to Look For in Disclosures When Buying a Home

Buying a home in California can be a challenge for many reasons, but one that a lot of people don’t expect is the volume of disclosures that they will receive during the process. If you’re working with a good agent, she or he should help you with the specifics of the particular property you’re considering, but let’s take an overview of how disclosures work in California.

The basic rule is that a seller should disclose any material facts that the seller is aware of.  A “material fact” is pretty much anything that might be considered important by a buyer. But note that a seller is generally not required to investigate facts about the property; they only need to disclose what they know. That means that a seller who checks the “no” box on a form is just saying he or she doesn’t know about that particular item, not guaranteeing that it isn’t present. This is especially important if you’re buying from someone who has not owned the property for a long time, or in a trust or probate sale, since there may be issues that the owner isn’t aware of.

Beyond the basic rule, California law requires a “Transfer Disclosure Statement” for residential property. This form will cover many of the of common facts and possible issues with residential property that an owner might disclose. Expect to get one of these for any residential purchase.

Many sellers supplement this required disclosure with other forms and disclosures. Don’t be surprised if the disclosures seem overly voluminous. Extensive disclosures are common in California, and are not necessarily a sign that there are significant problems with the property. You will need to review the documents carefully to determine if there are any issues that are important to you.

Also, just because you’re getting reams of disclosure forms doesn’t mean you should slack on your own inspection of the property. As a general rule, purchasers of residential property will at a minimum view the property themselves (usually with their agent) to look for any obvious issues, and will have a professional termite inspection and property inspection performed.  In some cases, additional inspections may be appropriate.

Finally, what do you do with all this information you’ve been given? First of all, share it with the important people in this transaction. If you have questions about particular issues that have been raised, talk to your agent or attorney about them. Share copies of the disclosures with your home inspector, so he or she knows that there may be particular items to look for. And ask questions.

As a buyer, the disclosures are there for your benefit in making your home buying decision. Make full use of them.