Jim Valentine: Racing through the disclosures
Residential real estate has many disclosures these days — some legally required, some required by office brokers and others just for peace of mind. When signing an offer, buying or selling, the focus is usually on the terms and conditions, i.e. price, method of payment, who pays for what, how long before it will close, etc. After the offer is presented, understood and agreed to, the disclosures are presented. Typically, not much thought is given to preparing them or reading them for content.
In the normal transaction where there are no glitches, there is little risk in glossing over the disclosures. However, when there are problems with the property the accuracy, transparency and truthfulness of the disclosures are of utmost importance. This is when the rush to finish signing can backfire in a big way.
Agents don’t sign the Nevada state required form titled “Duties Owed by a Nevada Licensee,” but it does commit them to specific performance, specifically where it says, “A Nevada real estate licensee shall: (3) Disclose to each party to the real estate transaction as soon as practicable: a. Any material and relevant facts, data or information which licensee knows, or with reasonable care and diligence the licensee should know, about the property.” When things digress to a litigious relationship, this is a catch-all clause to the lawyers that are trying to advance their client’s cause with a big net around the parties.
One of the activities that can get swept up by attorneys in this broad-brush approach of theirs is the hastening of the disclosure documentation. The agent should slow things down and make sure the client understands what they are signing, why they are signing it and, if the form involves the sharing of information, that it is accurate to the best knowledge of the party signing it. It isn’t a race to get the documents signed; rather, it is a process to have a complete and accurate set of documents in the file for everyone to reference and rely on.
There are some real esoteric disclosures these days that serve a specific purpose and should be included in the right situation. It is important to not simply load up a file with dozens of disclosures hoping that it will minimize the legal exposure you might have. Simply having a signed disclosure won’t give you certain protection. Make sure that all disclosures are relevant, needed, understood and signed by all the parties. It isn’t unusual these days to have one party sign disclosures and the other party neglect, or flat refuse to sign them. In most cases, the effort of requesting their signature and their stated refusal to do so may be enough protection. That information should be kept in the file.
If you are in a hurry to sign for a valid reason, you can do so without reading all of the “fine print” of all of the disclosures, but don’t sign your approval of any of the property specific disclosures, i.e. Sellers Real Property Disclosure or a company specific property disclosure. Sign the ones that give you general notice of things, i.e. Flood Disclosure, Right to Farm Disclosure, Wire Fraud Disclosure, etc. that are simply giving you notice but not asking you to agree to anything.
Our advice: Our motto for many years has been, “When in doubt, disclose!” If you have a question about something it is better to put it out in the spotlight where the Buyer can determine its importance to them and their intended use of the property. If you have a question about something in a disclosure, be sure to ask your agent. If it is property specific, your agent will have to get it from the listing agent and seller. Don’t sign until you are comfortable with your understanding of what is being represented to you.
Haste can make a mess when it comes to filling out a detailed disclosure. Don’t rush it; you might end up spending a lot of time remedying the situation that was caused by an effort to save mere minutes. When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. email@example.com.