There are numerous requirements in the state of california for disclosure by a seller of real estate to the buyer. Without expertise in this field it would be impossible for a typical seller to be aware of these disclosure requirements. Not complying with the disclosure requirements could subject a seller to serious negative ramifications including but not limited to lawsuits for noncompliance, punitive damages, rescission of the transaction, and even criminal accusations.
Disclosures required of a seller of real estate may include the following. This is not meant to be a complete list and new disclosure requirements have been passed by legislation and will be phased in overtime along with even more new ones, likely.
Real Estate Transfer Disclosure Statement
Local Option Real Estate Transfer Disclosure Statement
Natural Hazards Disclosure
A. Flood Hazard Zones. B. Potential for Flooding Due to a Dam Failure C. Fire Hazard Severity Zones. D. Wildland Fire Areas. E. Earthquake Fault Zones. F. Seismic Hazard Zones. 1. Landslide Areas. 2. Liquefaction Zones.
Mello-Roos Bonds and Taxes
Window Security Bars Disclosure
Industrial Uses Disclosure.
Methamphetamine Contamination Disclosure.
Smoke Detector Statement Of Compliance
Disclosure Regarding Lead-Based Paint Hazards
California’s Environmental Hazards Pamphlet.
Delivery of Structural Pest Control Inspection and Certification Reports.
Energy Conservation Retrofit and Thermal Insulation Disclosures.
Foreign Investment In Real Property Tax Act.
Notice and Disclosure To Buyer Of State Withholding On Disposition Of California Real Property.
Furnishing Controlling Documented Financial Statements Concerning Common Interest Developments
Notice Regarding the Advisability Of Title Insurance
Certification Regarding Water Heater Security Against Earthquake.
Locations of Registered Sex Offenders Database
Complying with the above list of disclosures can be time consuming, costly and daunting. As experts in the field, we handle many of them and leave the rest for other qualified professionals to protect all the parties in the sales transaction.
We realize that most listings are sold by cooperating brokers. Therefore, we only work for our client as the listing broker focusing valuable resources in our field of expertise thereby saving time. In addition, we make up for lost commission revenue by sales volume. Furthermore, when we do sell the property directly to the buyer as their broker, we derive the selling commission.
No. None. There are all the typical closing costs though that are necessary for all real estate transfers. These include, but are not limited to, title insurance, escrow fees, notary fees, disclosure company fees, etc. There are also optional fees depending upon the terms of the sale. These may include, but are not limited to, a homeowner’s warranty policy, termite inspection and report, termite repair work, FHA/VA repair requirements, etc. These and others are negotiable and will depend upon all the aspects of the sales terms.
There are many disclosures that the brokers provide for the benefit of the seller, our client, and the buyer and the buyer’s agent. There are additional disclosures also incumbent upon the broker as well that are prepared and signed by the broker.
Other disclosures, such as the Natural Hazards Disclosure (NHD) and Environmental Hazards report, require extensive professional research. For example, research and disclosure is done for flood zone areas, earthquake fault zones, liquefaction areas, current and past oil and gas wells, toxic release inventories, and fire areas just to name a few. There is a myriad of databases needed for the determination of many of the required disclosures. Subscribing to and accessing the multitude of databases is not typically done by the broker due to the fees, the sheer volume of databases for reference purposes, the extraordinary time needed, margin for errors, and liability issues. We leave the appropriate disclosures to the professionals in their field of expertise and they can typically provide these services for less than $100. Furthermore, these companies will provide a greater degree of protection to the owner due to typical errors and omissions insurance and their expertise justifiably relied upon by the sellers, buyers, and brokers.
There are a myriad of disclosures required under CA laws. For the protection of all the parties to the transaction, a professional third-party service is used to assure compliance with the disclosure requirements. This shifts any liabilities to these professionals should the disclosures be insufficient or inaccurate. The companies that provide the required disclosures, have access to a myriad of databases needed to conduct the research and have the expertise to properly analyze, map and report it. Some of the companies providing these professional services, can provide these disclosures and reports for less than $100 per transaction.
A lockbox is literally a box located at the property in a convenient place such as the front door and contains the keys to the property within the box. They can be mechanical devices requiring a specific combination or electronic devices requiring an electronic key.
All users of a computerized lockbox for real estate sales purposes have to have a real estate salesperson license working under the supervision of a licensed broker or be a licensed broker themselves. These individuals using an electronic lockbox key are verified licensees and also registered with the company that provides the electronic lockbox key. The electronic lockboxes are programmable and record data. The boxes allow access only during specific pre-programmed days and times, if needed. When a real estate licensee uses the lockbox, the date, time, and user is recorded for the further protection of the owner or occupants
As previously stated, most sales are through the results of cooperating sales brokers representing their buyers and then working with your listing broker. Oft times, the buyer’s and their broker are on a strict time schedule and desire to see as many competing listings in as short a time span as possible due to busy schedules. They demand ease of showing and on-demand viewing at their convenience and on their time schedules or otherwise move on to view other alternative properties for sale. To facilitate the ease of showing the property to prospective purchasers and offer the greatest amount and ease of marketing exposure, we use lockboxes. The use of a lockbox will eliminate the need for the owner or occupants to arrange appointments, meetings, and showings with the potential broker and prospective buyers. Oft times, a broker would like to pre-tour a property before showing it to a client. These brokers would typically do this at their own convenience making a lockbox an essential element. As a courtesy to the seller and the property occupants, we typically ask that the brokers contact the occupants prior to showings.
Studies have shown that new listings, initially, receive the most interest. It is important to capitalize on this by pricing the property appropriately for the greatest market acceptance and exposure. Over-pricing the listing is disingenuous to the client and wastes everybody’s time. An overpriced listing causes the listing to become stale and not being shown by real estate professionals. The property gets a poor reputation in the marketplace. Overpriced properties will not appraise for loan purposes. Overpriced properties become stigmatized.
Because time is a limited resource and for the reasons stated above, we will not market any properties we believe to be overpriced. Many other less scrupulous brokers will accept overpriced listings in hopes that the seller will eventually become reasonable and agree to reduce the price in the future as it languishes on the market. The marketing momentum that otherwise occurs from a new adequately priced listing is lost forever along with everybody’s time and efforts. Your property is a huge asset and you need an unbiased expert and not just somebody who tells you what you want to hear with false and unrealistic representations. Obviously, in appreciating markets, we will suggest higher than fair market value prices as prices increase to get the seller the greatest sales price possible as the seller is our client and our fiduciary duty is to get our client the highest sales price possible with the most qualified buyers and at the best terms for the seller weighing all factors.
As previously mentioned, we only charge a mere 1% listing commission providing an unmatched professional full-service real estate brokerage experience with years of experience. Real estate commissions are completely negotiable between the seller and their broker. We weigh supply and demand and then suggest a cooperating broker’s selling commission. Currently, we suggest a 2.5% commission to any successful selling broker. Still, this is substantially less than other brokers asking for 6% commission with 3% going to the listing broker and 3% to the selling broker. Depending upon supply and demand, these suggested figures vary depending upon market conditions. A selling broker’s commission less than 2.5% will reduce showings by brokers because they will be more inclined to show the listings that will offer a higher commission. To illustrate, a broker is more likely to show properties that offer the cooperating seller’s broker a 3% commission. As the commission is reduced, there are fewer showings of the property to prospective purchasers. Again, because of our marketing research, we would suggest a lower commission to further save the seller commission dollars.
As the commission is reduced, there are fewer showings of the property to prospective purchasers. If the commission is too low, the property will not receive the exposure needed to attain a final sales price that reflects the top market value the seller deserves. Furthermore, our fiduciary duty to you, the seller, is to obtain the highest fair market value as possible. We could not attain this if we did not offer reasonable commissions within the industry. Our reputation within the industry is critical to you as well as us so we won’t insult the hardworking professionals and do not work with unreasonably low commissions thus ensuring fair market value sales and nothing less for our clients.
We are much better! Most of the alleged full-service brokerage companies have mere sales licensees with many of them having little or no experience. Brokerage companies allow sales licensees to work under their license and tutelage. Many of these agents have little or no experience and are simply in it for the commissions. The seller needs a professional to represent their best interests. We have a fiduciary duty to do so. As professionals in the business and literally selling thousands of properties, we have the experience necessary to protect the sellers. Furthermore, there is nothing significant that we don’t offer marketing wise that any other broker offers. With reduced commissions, we will save you thousands of dollars with better representation and professional sales experience.
Contingent sales come in a variety of types. There are contingencies based upon available financing, appraised value, inspections, termite work, etc. Clients, buyers, and sellers have different needs, motivations, and circumstances related to their transactions. For example, a seller may want to sell their property contingent upon the seller finding and buying another suitable property with a simultaneous close of escrow. We have the expertise to effect this. Each client’s needs are discussed, analyzed and then accommodated.
If you don’t find an answer to your questions here, feel free to contact us. We are here to help and pride ourselves on excellence in customer service and professionalism.
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