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The importance of seller disclousures and 5 tips for filling them out

Home sellers Disclosures

Your seller’s TDS (Transfer Disclosure Statement) and SPQ (Seller Property Questionnaire)
are two of the most important documents a seller will complete, they will be closely scrutinized by the buyer and their agent. Here are some important things to keep in mind as complete these disclosures.

The TDS and SPQ are two of the most annoying documents that a seller is required to fill out. They are basically a test on how well you know your own home. They exist to provide the buyer with any and all knowledge you have of your property. The two documents together consist of seven pages of questions and explanations of everything from what type and condition all the house hold appliances are in to “has anybody died on the property within the last three years”. Since the leading cause of lawsuits against sellers is failure to disclose its important to be fourth coming and honest. However, these documents should not be feared but revered in a CYA kind of way! Don’t let your agent hand you these documents or Docusign them over to you and expect you to fill it out on your own, insist they sit down with you and go over them in detail. Here are five tips for completing the disclosures.

1. Do Your Research
If you purchased your home within the recent past and had a home inspection, that document can be a useful reference as to the make, model and age of certain components in your home such as the A/C system, water heater, etc. Keep in mind that if you have replaced any of these items, then you will need to complete the disclosure reflective of that information.
2. Be Accurate
If you had an inspection for insurance purposes at the time of purchase, that could tell you the age and type of key components such as the roof, plumbing and electrical. Use this to help determine the present age when you are completing the disclosure. If you have had any home warranty work done refer back to the paper work if you have it.
3. Be Honest
Answer every question to the best of your knowledge. If there was something that happened such as a roof leak or water damage for example, provide as much information as possible. Buyers want to know when the issue occurred, the nature of the damage and what was done to repair or address the issue. If an insurance claim was filed, be sure to note that and what the outcome was as far as coverage. The claim could very well turn up when the new buyer works on obtaining insurance – better for the buyer to learn about it from the disclosure first. Attach any relevant paperwork as well such as receipts or invoices. Buyers need assurance that all adds up. Surprise is never a good thing in real estate.
4. Be Clear
Don’t leave a buyer guessing. Avoid vague answers or leaving questions blank. That only raises more questions for a buyer. If you don’t know or the question is not applicable to your kind of property, note that.
5. Set Expectations
The biggest challenge for disclosures arises when the party selling the property has never occupied it or only lived in it for a brief period of time. Be sure to clearly state what your occupancy situation was and to what extent if any, you have knowledge about the property. Setting proper expectations upfront in this regard with potential buyers is important.

If necessary, attach an additional explanation for anything that requires more information than what the form provides. Make sure all information is legible and will transmit clearly across a variety of mediums when printed, emailed, scanned or faxed.
In short, be thorough and provide information to the buyer that will give them confidence in their decision. Contrary to popular belief, buyers are not frustrated with too much disclosure, but rather not enough.

 

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