Real Estate Disclosures in Sacramento – What You Have to Disclose

While their purpose should come as no mystery, disclosures have always been a hot button for both sellers and buyers. There is a lot of confusion in Sacramento whether or not disclosures need to be provided if you are selling your house As-Is. For those of you that think that you are exempt because all houses in California are sold As-Is, that would be a mistake. The fact that a house is sold as is does not that the sellers and their agents do not need to provide the buyers and their agents with the legally required disclosures. But what disclosures are really needed? What is there purpose?

Real estate disclosures provide protection for sellers, buyers and even the real estate agents on all sides of the transaction. They provide cover by creating a set of documents that everyone that is a party to the transaction signs. In reality though, they also provide a plausible deniability for real estate agents and brokerages for any missteps along the way. As the seller, be careful what you sign as real estate agent provided disclosures are not always required by law. 

Lead Paint, Water Heater, smoke detector, carbon monoxide and the Transfer Disclosure Statements. What about the agent visual disclosures? Wire Fraud? The list goes on and on.

Because of all of the recent litigation, there has been a rush to create even more disclosure forms. So many that it has made it difficult to distinguish which specific documents are required anymore. To hedge the threat of a lawsuit, real estate brokerages and their law firms have drafted so many new disclosures that are neither required by law or the title company for closing. In fact, some of these new disclosures, are a figment of the real estate agencies imaginations and by extension, their mere existence in the files create a new liability for sellers that did not previously exist. Sellers should be suspicious of any documents that they sign that are being entered into the record that are NOT required by law. Do you really know what they say or how they could be interpreted once they are signed? We as sellers often blindly sign them because we are asked to by our agents.

My rule of thumb? Be as open and honest as possible, tell what you know about your house, but  whatever you do… don’t speculate on the rest. In my latest post, we will cover what you need to disclose by law and why you should want to. 

Being an open and honest seller may help you avoid a lawsuit, and it will allow you to know that you hid nothing in the process. Time has a funny way of revealing the truth and most buyers are going to find out about the houses defects regardless. The disclosures are there to let you tell everyone what you know. Whether that garage conversion was permitted or the cracks in the ceiling are part of a bigger foundation or settling issue. Your house has a history and you need to share it with potential buyers. It is a fact… hiding defects, looming repairs, and any other issues with the home will only come back to bite you in the end. Whether through a lawsuit or just because it’s the right thing to do….

Most real estate lawsuits occur because of non-disclosure. That means because you did not say something. If you Disclose what you know, you  most likely won’t be sued. What all Sellers should do is to Order Inspections and include them as a part of the Disclosures.

Real Estate Disclosures in Sacramento – What You Have to Disclose

So exactly how much are you required to disclose ? In a “Nutshell” you need to Disclose anything that can affect the value of the property. Here are just a few of the things you should address:

  • Issues with the land, such as drainage, bad soil, and potential for flooding. Bad soil can limit building and low-lying areas can be prone to flooding and water damage. Certain parts of Sacramento are designated flood plains and will be part of a Natural Hazards report.
  • Foundation level and known cracks must be disclosed. If the house settles more than it already has, it could experience structural damage. These are best left to inspectors. You have to disclose cracks in foundation, but some of those may mean nothing.
  • Plumbing problems, sewer issues, and leaky pipes all need to be brought to the forefront. Some of the most expensive home repairs stem from water damage.
  • Any known problems or irregularities with the heating and cooling systems should be disclosed. Otherwise its the age if known.
  • If you have a problem with cockroaches, rats, ants, termites or moles, you will need to inform your potential buyer. But the best way to deal with this is to call an exterminator and disclose that.
  • Disclose the age of the roof. If it leaks.. tell your buyer.
  • Lead paint is required by law. This disclosure is one of the most common you will see with home sales and rentals.
  • Are there issues that will affect the title? That is right in the preliminary title report that the seller and the buyers already sign.
  • Transfer Disclosure Statement is required by law
  • Ownership and foreign status is required by law and will be in the Title Docs. You dont need to provide your private information to the other real estate agent. Or yours for that matter.
  • You should also have documentation for repairs and insurance claims you’ve made in the past. You should be able to describe what was corrected and in some cases the materials that were used.

In California the seller is required to order and pay for a Natural Hazards Report (Cost approximately $100.00), California requires more in-depth disclosures of hazard zones which include flooding, earthquakes and other environmental factors affecting the land. Some states will also require any violent crimes committed in the home be common knowledge. Not every state requires this, but it is a good rule of thumb to follow. Think about what you would want to know if you were buying a home for yourself!

Disclosures help a buyer learn as much as possible about a house before making their purchase.

Whether or not you are selling a great home, the buyers will want to know the specifics about a house. When you keep something to yourself, regardless of how minor, that needed repair can snowball in much bigger problems. That is why your buyers should always order inspections. Many properties have somethings revealed during the inspection that the seller wasn’t aware of or prepared for. It is NOT uncommon for buyers to request repairs or ask for the seller to drop the price.

Your house has multiple parts that all work together. The smart sellers choose to have their home inspected prior to a sale. This allows them to make the necessary repairs ahead of time, lessening potential for surprises while in escrow. An inspection will also show good-faith in selling. You are telling the world the houses condition before it is sold.

Disclosure rules vary state to state. Your agent, attorney or broker will be able to supply you a checklist that covers the requirements for your state. Review the list in its entirety and add as many detailed notes as possible. Don’t forget to include the dates of upgrades and repairs. Fill out the form as honestly and as completely as possible. If you have questions, it is best to talk to a lawyer instead of your agent. Your agent might avoid such questions as they are out of their scope, and they want to lessen their liability.

Remember, YOU CAN GET SUED for being dishonest.

And if you are found liable, you will need to pay for repairs, legal expenses, punitive damages and in some cases, the sale can be rescinded. Make sure you are working with a trusted professional to help guide you through real estate disclosures.

Are you selling your home in Sacramento? If you have questions, we have answers! Fill out this form, or give our office a call now! (209)481-7780

We buy Houses in any condition, without inspections and without contingencies. Disclosures? They are not much use for us.

My name is Peter Westbrook and we buy houses in Sacramento, Stockton and Modesto. Sometime the best way to solve an on going house problem is to just sell it. Call me today and i will talk to you personally. What have you got to lose?


Peter Westbrook

Peter Westbrook is a local Cash Home Buyer / Real Estate Investor in Stockton, Sacramento and Modesto CA and Tulsa Oklahoma. He has written numerous real estate articles that have been published here and by other blog and news outlets. Peter has appeared on several local and national news reports regarding the state of the Stockton and Sacramento Real Estate Markets.

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