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Three Pitfalls When Reviewing Disclosures

November 13 2018
November 13 2018

The homeownership path typically looks something like this.....
Buyer starts searching for homes. Buyer identifies a home that they love. Buyer writes an offer to purchase a home.
There is one problem here. The buyer never did their due-diligence to purchase the home they love!
As your realtor, the three most important components of my job when representing buyers is to make sure that they:
  • Know what they're buying!
  • Get the property they want!
  • Don't overpay!
The disclosure package is a very important piece to the puzzle of knowing what you're buying.
Here are three quick tips when reviewing disclosure packages:
- Make sure the property is not in a high fire severity zone, or a flood zone (or any other zone that may require more insurance). Many areas are in these zones, but some unprepared buyers are often times surprised to find out that the home they love is in a flood zone and will require a supplemental insurance policy costing $2,000 or more per year! I will not let this happen to you. This information is in the Natural Hazard Disclosure.
- Read the preliminary title report! This is the legal document that physically outlines exactly what you're buying. Make sure that there are no clouds on the title that can't be cleared or you won't be able to get title insurance! Make sure there are no easements that can't be explained! Unprepared buyers in the past have purchased homes only to find out that they couldn't buy it with clear title and they've had to cancel the transaction which means a loss of earnest money.
- Understand all of the major mechanical systems in the home inspection and pest inspection costs. Home inspections will cover a variety of items. Definitely pay attention to the big-ticket items first i.e.: foundation, roof, furnace, electrical, plumbing, drainage. Be sure to review all items, but these are the ones that are the most important to verify when checking remaining useful life.

Photo by PhotoMIX Ltd. from Pexels


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