What to know in a Real Estate Contract
The homebuying process in Sacramento is one of discovery. Throughout, you will receive crucial information on the condition of the property – from its physical attributes to the condition of its title. Piece by piece, you will learn what you need to know to make an informed purchase. Following is an explanation of the most significant parts of the puzzle.
Transfer Disclosure Statement
The seller of your property is required by law to furnish you with a "Real Estate Transfer Disclosure Statement,” (TDS), in which the seller will make known to you important disclosures about that property, including any known existing conditions, any hazards or nuisances. For example, if the property drains improperly or if there are cracks in the chimney and the seller knows about it, he or she is required to let you know via the TDS. In the TDS, the seller’s agent and the buyer’s agent are also obligated to inspect the property and to provide results regarding any known existing conditions, any hazards or nuisances. If the TDS is delivered to you after execution of the offer to purchase, you have three days if the form is delivered to you in person or five days if it is delivered to you by mail, to use it to terminate the contract if you are not satisfied with its contents. Home Inspection Report
Just as important as the TDS is the home inspection report. While the TDS documents the property’s condition, to the knowledge of the seller, a home inspection will provide you with the additional insight of a construction expert. As a result, I advise anyone buying a home to first have it inspected by a professional home inspector who is:
The report also will identify areas that could not be inspected and may recommend additional inspections by other experts in areas including roofs, foundations, soils, drainage or pools. Less usual, but also recommended from time to time, are inspections for health-related risks such as radon gas, asbestos or problems with water or waste disposal systems. While additional inspections will cost more money, they definitely are worth it if they uncover an expensive defect in the property. A general inspector will focus on the structure, construction, and mechanical systems of the house, and will make you aware only of repairs that are needed. Generally, an inspector checks (and gives estimated prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, heating and cooling systems, water source and quality, the foundation, doors, windows, ceilings, walls, floors, and roof. The inspector does not evaluate whether or not you're getting good value for your money. Usually, there will be an inspection clause in the contract. Sometimes, the seller will provide a report of a home inspection aid for by the seller. If conditions or defects are disclosed in the report you can:
Pest Control Inspection Report
While you are in escrow, you should have the property inspected by a licensed pest control professional. While termites or other pest infestations are not common, pest control operators also are trained to look for dry rot, usually caused where wood comes into continuous contact with water. Dry rot can be serious and should be fixed immediately. If any condition is discovered in a pest control report, it needs to be corrected and the property re-inspected by a certified pest control inspector, before you close the sale of the home. Pest control reports generally cost around $200-$300.
Smoke Detector and Water Heater
During the escrow process, sellers are required to provide for you evidence that they have equipped the home with smoke detectors, and that water heaters are braced, anchored, or strapped to resist falling in an earthquake. Contact Tom Gonsalves a Sacramento Real Estate Agent for more information.
Transfer Disclosure Statement
The seller of your property is required by law to furnish you with a "Real Estate Transfer Disclosure Statement,” (TDS), in which the seller will make known to you important disclosures about that property, including any known existing conditions, any hazards or nuisances. For example, if the property drains improperly or if there are cracks in the chimney and the seller knows about it, he or she is required to let you know via the TDS. In the TDS, the seller’s agent and the buyer’s agent are also obligated to inspect the property and to provide results regarding any known existing conditions, any hazards or nuisances. If the TDS is delivered to you after execution of the offer to purchase, you have three days if the form is delivered to you in person or five days if it is delivered to you by mail, to use it to terminate the contract if you are not satisfied with its contents. Home Inspection Report
Just as important as the TDS is the home inspection report. While the TDS documents the property’s condition, to the knowledge of the seller, a home inspection will provide you with the additional insight of a construction expert. As a result, I advise anyone buying a home to first have it inspected by a professional home inspector who is:
- a licensed general contractor
- a member of a recognized home inspection trade group
- has professional liability insurance
The report also will identify areas that could not be inspected and may recommend additional inspections by other experts in areas including roofs, foundations, soils, drainage or pools. Less usual, but also recommended from time to time, are inspections for health-related risks such as radon gas, asbestos or problems with water or waste disposal systems. While additional inspections will cost more money, they definitely are worth it if they uncover an expensive defect in the property. A general inspector will focus on the structure, construction, and mechanical systems of the house, and will make you aware only of repairs that are needed. Generally, an inspector checks (and gives estimated prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, heating and cooling systems, water source and quality, the foundation, doors, windows, ceilings, walls, floors, and roof. The inspector does not evaluate whether or not you're getting good value for your money. Usually, there will be an inspection clause in the contract. Sometimes, the seller will provide a report of a home inspection aid for by the seller. If conditions or defects are disclosed in the report you can:
- Negotiate for the seller to fix the problems prior to close of escrow,
- Receive a credit from the seller for an amount to make the repairs; or
- Cancel the contract if your and the seller cannot agree on the repairs or their costs.
Pest Control Inspection Report
While you are in escrow, you should have the property inspected by a licensed pest control professional. While termites or other pest infestations are not common, pest control operators also are trained to look for dry rot, usually caused where wood comes into continuous contact with water. Dry rot can be serious and should be fixed immediately. If any condition is discovered in a pest control report, it needs to be corrected and the property re-inspected by a certified pest control inspector, before you close the sale of the home. Pest control reports generally cost around $200-$300.
Smoke Detector and Water Heater
During the escrow process, sellers are required to provide for you evidence that they have equipped the home with smoke detectors, and that water heaters are braced, anchored, or strapped to resist falling in an earthquake. Contact Tom Gonsalves a Sacramento Real Estate Agent for more information.