Start by walking the property inside and out, noting your observations on paper. Write any descriptions you note in detail, including your concern, your follow up with the seller and any recommendation that you may have as you consider the best interests of the buyer. For instance, if in the process of observing the foundation, an agent notes a 1 to 2 inch crack; his description might read similar to the following:
“The foundation of the house is cracked, and the seller acknowledges this fact.”
However, this description is too vague and as such would likely do little to protect him in the unfortunate event the buyer brings suit against the seller after the transaction was final if he discovered that the crack was a sign of a much bigger and very costly problem. For this reason, the description would better support the agent’s interests if it read similar to the following:
“I have noted a crack in the foundation and after making my observation asked the seller if he was aware of the crack. He said that he was. I asked if he knew if the crack was isolated to the observable area, or if it extended further into more of the foundation. He said that he did not know the answer to my question. As a result, I have recommended that the buyer have the foundation inspected by a licensed foundation inspector during the inspection period.”
After the agent’s inspection is complete, he or she should then question the seller to determine the facts associated with any flaws identified. Comparing your notes with the seller’s will also help ensure the seller has identified all important factors associated with flaws. The seller can then update his or her disclosure. Also, regardless if an official form is used for the agent’s disclosure or just handwritten notes, the document should be signed and dated by the agent and the buyer. As a good measure of your intention, it is also recommended that you include a statement similar to the following listed above the agent’s and buyer’s signature lines:
“My signature listed below indicates that I have read, understand, and acknowledge receiving a copy of this document.”
After signing, this document (because it is written) it becomes an indisputable account of your efforts to ensure the buyer’s best interests were met.
When taking a listing you should walk the property and write down all your observations and follow up with the seller on each item. So why is the second example better? Yes; it’s more descriptive, but more importantly it specifically:
- Identifies the agent’s observation of the flaw
- Demonstrates the agent’s interest in understanding the extent of the problem
- Shows that the agent brought the flaw to the buyer’s attention
- In the buyer’s best interest, the agent cited his recommendation that an inspection be performed by a qualified inspector.
When taking a listing, you should walk the property and write down all your observations and follow up with the seller on each item.
- You should question the seller of property regarding any flaws that you observe during your inspection.
- Your questioning should identify if the seller had knowledge regarding the flaw if he or she took any action to understand and fix the flaw, and what specifically was done, including who did the repair work.
- You should also ask if the seller knows that the problem is fixed (e.g., water intrusion no longer occurs during rain).
- If there is a doubt that the flaw might still have a problem, you should inform the buyer by providing them with a copy of your written disclosure form. This may also include your recommendation that further inspection by a credible inspector take place.
- Regardless of your state’s law requiring agent disclosure, you are encouraged to provide one in writing.
- Any identified comments in your written disclosure should be detailed sufficiently that they show your interest in identifying significant flaws, your effort to understand the extent of these flaws, including your recommendations to the buyer to further explore the problems (e.g., hire an inspector).
- Your disclosure should be signed and dated by you and the buyer.
- A copy of your disclosure should be provided to at least the buyer, the buyer’s agent, the seller, and the seller’s agent.