Disclosures vs. Agreements in a California Real Estate Transaction
A real estate transaction process in California is made up largely of sending and receiving a number of different documents.
To ensure that the real estate transaction is completed quickly and efficiently, it’s important to be prepared and understand the different steps in this process.
Before entering into a real estate transaction or signing any documents, it’s important to understand the differences between disclosures and agreements.
Let’s take a look at the key differences between disclosures and agreements in a California real estate transaction.
What is a Real Estate Disclosure?
A disclosure is the reveal of a fact which was previously unknown. Disclosures can be made by either the buyer or the seller. When you sign a disclosure, you are simply acknowledging that have received the information.
In California, the law requires sellers to disclose certain information. This allows buyers to make an informed decision when deciding whether or not to purchase a property.
Required disclosures are generally related to the ownership and condition of the property. This could include property tax details, a real estate transfer disclosure agreement, structural issues, the condition of appliances, and more.
Disclosures must be made in writing in order to provide evidence that the necessary information has been communicated to the buyer.
If the seller fails to disclose certain information, they could face fines or penalties for violating the law regarding real estate disclosures.
Failure to Disclose
As mentioned above, California law requires sellers to disclose certain information in a real estate transaction. If the seller fails to do so, they become liable for any actual damages suffered by the buyer.
This doesn’t affect the actual sale of the property, but the seller will be liable for damages and repairs.
Failure to disclose doesn’t just include the omission of information. It also includes any false information disclosed by the seller. If the seller doesn’t communicate the necessary information or lies about any information, they become liable for damages.
What is a Real Estate Agreement?
In a California real estate transaction, an agreement is a contract which dictates the terms of the transaction. This includes the offer, acceptance, payment, terms, and more.
When you enter into an agreement, you are indicating that you agree to the terms of the transaction and you agree to abide by these terms. When you sign an agreement, you are legally bound to it.
Agreements can be arranged between buyers and sellers or between the buyer or seller and their real estate agent.
Whereas a disclosure refers to the communication of previously unknown information, an agreement is simply a contract that defines the terms of the real estate transaction.
Both disclosures and agreements are critical components of a real estate transaction in California.
While these concepts are very different, you need to be familiar with them when partaking in any real estate transaction. It’s important to be familiar with these ideas in order to ensure that the transaction is completed quickly and efficiently.
By reviewing this information, you can ensure that you are prepared before buying or selling a property in California.