The conclusion of required disclosures for an REO seller (bank owned properties).

1. Smoke Detectors. The seller of a single-family dwelling must deliver to the buyer a written statement of compliance with the smoke detector law (Cal. Health & Safety 13113.8(b).
2. Water Heater Bracing. The seller of any real property containing a water heater must certify in writing to the buyer that the existing residential water heater is properly braced, anchored, or strapped. (Cal. Health & Safety Code 19211)

As stated before, REO sellers must provide certain disclosures to the buyer that is mandated by California law. Unfortunately many Reo sellers believe that are exempt from all disclosures. It will be up to the buyer to either demand these disclosures or not. If they don’t they probably should seek advice from an Attorney qualified to give real estate legal advice on what it may mean to them.

See San Diego REO: Part 4 

See California Real Estate forms (PDF)

When a buyer purchases an REO Property (Bank Owned), there are disclosures that the seller (REO seller), must make to the buyer. These disclosures are legally required and are mandated by California law. Unfortunately many REO sellers believe they are exempt from any disclosures. They take the position that they have never lived in the property and are not required to provide disclosures. Don’t forget there are many REO sellers that are not familiar with California law. There are many disclosures that do not have to provide, but there are many they do. The buyer is caught in a difficult position. If they demand that the REO seller provide these required disclosures, they may loose the sale. In other words the REO seller just says we are not going to provide them. The buyer is then left in the situation of risking purchasing the property without the required  disclosures. They can probably also just cancel the sale. But remember the REO lender will most likely will have already provided an addendum to the purchase agreement and in that addendum they my state they are not providing any disclosures. If that addendum is executed by the buyer, then it is a part of the contract. A buyer will most likely have a short period of time to do their due diligence (inspections etc.) and then they will be required by the purchase contract to release all contingencies. Once all contingencies are removed, the buyer’s deposit is subject to the liquidated damages paragraph in the purchase agreement. So the buyer better be sure they can live with the absence of those required disclosures. Once all contingencies are removed and the buyer tries to cancel the contract, they may be subject to loosing their deposit to the seller. I am not a lawyer and cannot give legal advice, but the buyer needs to be aware of this situation and seek legal advice from a real estate attorney if they so desire. Future blog posts will provide an advisory to potential buyers of what disclosures are mandated by California law that are provided by REO sellers.

See San Diego REO: Part 2 

See California Real Estate Forms (PDF)