At Innovative Real Estate we are very “innovative” and bold, but most importantly we are very smart and are here to protect our clients in their real estate transaction. After years of research and representation our legal counsel and broker have made the decision that we will no longer be using the Seller Disclosure Form. If you have bought or sold real estate this is most likely a form that you have seen. There are a lot of concerns we have found with this form and although the obligation still exists. Per this form below it states that “the seller is obligated to disclose to the buyers an defects that they know may materially affect the property that can’t be discovered by an ordinary prudent buyer” see below that is close (Utah Real Estate Seller’s Property Condition Disclosure Form)
That is still an obligation of all sellers we are not removing that, we are, instead, opening the doors of communication between buyer and seller and allowing the sellers to not be focused on only the information in the form, but instead, allowing them, as is contractually required, to disclose the information that they, as the seller, would like to disclose.
This protects both buyers and sellers and here is why….
Sellers are protected
- Total autonomy to report what they think is material
- Protection about misrepresentation of information (for example, if they mark no because they didn’t remember or didn’t feel it important and later are sued for fraud…we don’t want that)
- Protection from historical documents (some documents are still available from past home sales and if it is documented somewhere it should be shared even if the current seller was not the owner at the time of the issue, should they have know? Is it fraud if they don’t?)
- Sellers are not focused on only the questions asked, but instead given an open ended focus for what their home is all about.
- It reduces the risk of ending up in a lawsuit because the sellers is not checking a box without knowing the whole story (how many investors have flipped homes without all the information…that is so scary to check those boxes)
- It puts the responsibility back into the buyers hands to complete their due diligence and ask questions that actual impact the transaction materially.
Buyers are protected
- Buyers don’t rely on what the sellers have disclosed and instead they exercise their due diligence to get all the information about their major purchase….THEIR NEW HOME
- Buyers ask the questions they really want to know and what materially could affect their purchase of the home
- It ensures that the buyers truly know the home, they have an inspection, they have all the tests they want completed and they too learn more about the house in general.
- Buyers need to consider how much information actually passes through owners particularly if there has ever been an investor owner, they need to know for themselves and not rely on a checkbox form.
We expect pushback. We expect some buyer representatives to be cautious and nervous. We also know that if we move forward as a brokerage that we can better protect our sellers and our buyers. We expect buyers to ask, does that mean they are hiding something? No! The obligation for them to share material defects is still there, they just don’t have to do it in a checkbox. The form is too general in some areas, too specific in others and ultimately it doesn’t open the door for the sellers to truly share what they are committing to share in the real estate purchase contract and we know we can do better!
I’m excited. I am excited to have this one more tool to be able to better protect my sellers (and buyers). I would love to discuss it with you more. Let me know if you have questions!