Disclosing About Disclosure
April 23, 2014 |
By Judy Houston
Real Estate requires complete focus on DISCLOUSRE — from beginning to end of each transaction. Recently, a judge from Phoenix Superior Court attended three of my Disclosure classes. After the third class, the judge told me he was in awe of what an agent must know in the way of Disclosure Law in order to assist a buyer or seller… confirmation real estate is a fulltime job of Disclosure!
Let me explain:
Client Consultations allow the agent to disclose their bio and background with the client. This introduction allows an agent to share their experience, background, and knowledge which is helpful in gaining the client’s loyalty and trust. Discussing and signing the Agency Disclosure and Election defines the relationship. The agent also discloses to the buyer or seller what to expect throughout the transaction.
Lender’s Pre-Qual discloses to the agent and seller that the buyer is capable of financially purchasing a property up to a certain amount.
MLS Plano, Tax Record, Stat Report, and CMA’s disclose a property’s details, along with market conditions, which enable the client to make decisions such as what price to offer for the property.
AAR Real Estate ZIP FORMS, when explained properly, disclose in each document what the client agrees to, discloses the obligations of the client and discloses the deadlines that must be adhered to. The AAR Zip Forms create layers of protection for the client, the agent and the real estate company. The AAR Forms additionally assist with the “specific disclosure forms”: SPDS, LBP, Affidavit of Disclosure, and Additional Clause Addendum.
Commitment for Title Insurance (Section 3 of the Purchase Contract), more specifically Schedule B, discloses encumbrances of the property – the items not included in the Title Policy.
Home Inspection Reports disclose the defects of a property.
An Appraisal discloses the value of the property.
The Final Walk Through discloses the property has been maintained by the sellers throughout the transaction, as required per Lines 170-171 of the Contract.
Settlement Statements disclose all financials as to which party pays what fees. It shows if a fee is split, pro-rated, or paid by one party.
Warranty Deed discloses and conveys title to the property.
As an instructor, I often disclose to real estate agents that I think taking additional Disclosure Classes for the six hours of general CE credit is smart. I teach many Disclosure Classes and each one focuses on different topics. Each class is a bit different, focusing on either the buyer, seller, or tenant; giving a vast amount of disclosure knowledge to agents and brokers.
The most powerful lesson: When in Doubt – Disclose!