One of the many disclosures a buyer will review and sign during their real estate transaction is a Transfer Disclosure Statement or TDS. Buyers should be encouraged to take their time and read all disclosures carefully but pay extra special attention to the TDS. The TDS is a disclosure from the seller to the buyer that discloses the items or issues on a property that a buyer might be concerned about.
The Transfer Disclosure Statement will cover items like if the seller is currently occupying the property and if so what items are included in the property and the properties overall condition. Items such as if the property has automatic sprinklers, garbage disposal, septic tank, etc and if so, do the items work? How a seller completes this report is critical as any items found to be defective at the close of escrow and furthermore proven a seller should have known about it and ultimately lied on the TDS will likely cause them a lawsuit.
The Transfer Disclosure Statement Needs Extra Attention!
Another important disclosure that goes hand in hand with the TDS is the Sellers Property Questionnaire or SPQ. This disclosure is much like the TDS in that it requires a seller to disclose items working or not that may be of interest to a buyer during the transaction.
Ultimately the TDS is there for both buyer and seller protection but a buyer can best benefit form this form as it must list all the defects in the home. The TDS along with the SPQ and a thorough home inspection will put a buyers feet on solid ground and give them the information they need to make educated decisions on their home purchase. Buyers be warned, there are a lot of papers to sign when buying a home but in the end you’re buying a home, it’s not a small purchase so take the time to cross the t’s and dot the i’s. A little work in the front end may save your thousands in the end.
The section in the TDS that is especially important is where it asks the seller to list all defects that are present in the property. The form gets pretty specific for instance it will require sellers to identify areas like electrical, plumbing, foundation, doors, floors sidewalks, exterior walls, roof, ceiling, fences and windows. Sellers must indicate under California Civil Code §1102 all material defects concerning a property including the presence of environmental hazards like mold, asbestos, etc, any zoning issues or violations and easements and or encroachments on a property.