As a real estate investor, you’ll be viewing many properties and it’s important to remember that in many cases, a home can hide many of its flaws, damage and other issues. Some problems may lack any sort of visible indicator. This is why real estate disclosures are so important, but it’s a tricky topic for the real estate investor. That’s precisely what we’ll explore in today’s article from The Short Sale Gal, Kristine Zelazo!
What Are Real Estate Disclosures?
Real estate disclosures are important documents, used to disclose important information about a property. Typically, the information that must be disclosed is related to issues that could impact the property’s value and desirability.
Each state has its own unique real estate disclosure requirements. In the strictest states, you must disclose information such as:
- prior damage from natural disasters;
- prior water damage;
- prior fire damage;
- prior earthquake damage;
- mold problems;
- termites and other infestation issues;
- roof leaks;
- basement leaks;
- recent deaths in the home;
- bothersome neighbors (i.e. a dog that’s constantly barking).
Property owners are also required to disclose information about the home’s vulnerability to problems such as flooding. For instance, if the house is in a high-risk flood plain, the new prospective owner must be informed of this fact.
Owners are also required to disclose if unapproved renovations, additions or other unpermitted work has been performed on the home.
Under normal circumstances, a real estate disclosure is a requisite part of a real estate transaction. But the requirements can be a bit different in the case of short sales and the sale of foreclosed bank-owned homes. Some states have less stringent requirements for these transactions, necessitating some extra research on the part of the real estate investor.
Are Real Estate Disclosures Required?
This is where things get a bit tricky. When it comes to short sales, bank-owned homes and other distressed properties, comprehensive real estate disclosures are not always required. Each state is unique in terms of its requirements. Some states, like California, have very comprehensive disclosure requirements, whereas this is not the case elsewhere.
But what’s more, even in cases where real estate disclosures are required, it’s not uncommon to encounter a scenario where the property owner — often, a bank — is not aware of many issues that would typically need to be disclosed.
For this reason, it’s very important to hire an experienced real estate inspector to view the property that you’re considering. Also, ideally, you should bring in your contractor so he or she can view the property. Your contractor isn’t just another set of eyes; they can also determine how much it will cost to get the property into salable condition — a key figure for an investor, as you’ll need to ensure there’s enough room in the transaction to allow for profit.
Ready to Get Started in Real Estate Investing?
If you’re getting started in real estate, consider working with a real estate investing mentor like The Short Sale Gal, Kristine Zelazo. Getting started in real estate investing can be somewhat challenging, but when done right, you can stand to make significant profits. You’ll have lots of advantages in this regard when you work with a real estate investing and short sale expert like Kristine Zelazo, better known as The Short Sale Gal.
Based in Florida, Kristine works with both buyers and sellers and she is an experienced negotiator. So if you’re an investor seeking to get started in buying short sales and need a great mentor or wish to pursue a short sale transaction for the sale of your property, turn to Kristine Zelazo, the Short Sale Gal!
To get started with selling your home, simply complete the home pre-sale form to provide Kristine with additional information on the property in question. Then, call 786.570.0360.