A Seller’s Disclosure is an essential document in any real estate transaction and serves as a key piece of the puzzle for first-time home buyers. It provides the seller’s knowledge about the property’s condition, enabling buyers to make informed decisions. However, it’s crucial to recognize that the disclosure is not a warranty or guarantee. It’s merely the seller’s opinion based on their awareness of the property’s state. To conduct effective due diligence, here’s what you should pay special attention to when reviewing the Seller’s Disclosure:
What Should Buyers Look for in the Sellers Disclosure Notice?
1. Is the Property Leased?
If the home is leased, you may not be able to move in immediately, as the tenant has rights under the lease agreement. Confirm the lease terms and expiration date to avoid surprises.
2. Features and Their Condition
The disclosure should list features and equipment, such as appliances, HVAC systems, or pool equipment, along with their current state. While the disclosure provides this information, verify which items will remain with the property. If you want specific items like a refrigerator or an outdoor grill, ensure they are included in the purchase contract.
3. Utility Providers
Verify the listed utility providers, such as water, electricity, and internet services, to ensure they service the property. Availability of specific services, such as high-speed internet, could be critical for your lifestyle. Additionally, confirm whether the home is located in a Municipal Utility District (MUD), as this often involves additional fees and property tax considerations.
4. Repairs and Remodeling
If the seller discloses work done on the property, such as remodeling or repairs (e.g., for flooding, fire, or pest damage), request supporting documentation like permits, receipts, and warranties. Ensure the work complied with local codes and was completed by licensed professionals.
5. Inspection Reports
Has the seller provided any prior inspection reports? While these reports offer helpful insights, consider hiring your own inspector for an accurate and up-to-date property evaluation.
6. Insurance Claims
Were there insurance claims on the property? Previous insurance claims can affect your ability to secure coverage. You should work with your insurance provider to confirm policy options before closing.
7. Easements, Encroachments, and Boundaries
Sellers must disclose any disputes or restrictions involving easements, encroachments, or boundary lines. To clarify property boundaries, consider ordering your own survey rather than relying solely on the seller’s.
8. Drainage and Flooding
Understand the property’s drainage and flooding history. Is it located in or near a flood plain? Water damage is a costly and recurring issue that can lead to structural problems. Consulting a water intrusion specialist can help you evaluate high-risk areas.
9. Foundation Issues
Foundation settlement or erosion is common in regions with expansive soil, like the Austin area. Since foundation repair is expensive, consider hiring an expert to evaluate the condition and stability of the foundation.
10. Disclosed Defects and Malfunctions
Review all disclosed defects and malfunctions carefully. Determine whether the seller plans to repair these issues or if you’ll be responsible for addressing them after purchase. Use this information to negotiate repairs or seller credits.
11. Wood Destroying Organisms (Pests)
The presence of termites or other wood-destroying organisms can be a serious concern, particularly in older properties. Ensure pest issues have been properly treated and resolved.
12. Notices from Authorities
Check for any notices from governmental agencies or private entities that may affect the property. These could involve foreclosures, zoning changes, mandatory repairs, or even condemnation.
Buyer’s Best Practices
While the Seller’s Disclosure is a critical resource, there are key steps you, as a buyer, should take to ensure you’re protected:
- Don’t Rely Solely on the Disclosure: Verify the information provided and conduct your own investigation into matters important to you, such as structural integrity, potential hazards, and neighborhood concerns.
- Hire a Qualified Home Inspector: Work with a professional inspector to evaluate every aspect of the property. Follow up on their recommendations for additional expert reviews, when applicable.
- Ask Questions: Don’t hesitate to seek clarification or further details from the seller or their agent about items listed in the disclosure.
- Review the Contract: Remember that the purchase contract governs the transaction. Ensure it includes guarantees for repairs, fixtures, and any negotiated terms.
Taking the Next Step
Buying a home is an exciting milestone, but navigating the disclosure process can be daunting for first-time buyers. Our experienced team at Eleven Oaks Realty specializes in helping homebuyers make informed decisions. Contact us today (call/text) at (512) 827-8323 or info@11OaksRealty.com to schedule a no-obligation consultation and take the first step toward your dream home.
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