If you are planning to move here to California, or are currently here, there are some disclosures you need to know about as a buyer (these vary from state to state - we had nothing this detailed in Massachusetts).

Rather than reprint the article here that I recently wrote, follow this link to read more about what sorts of disclosures you can expect during the due diligence period.

This post is about disclosures - specifically seller disclosures. However, if you are a buyer, I would read this as well, since it is important to understand what disclosures are all about and their relevance for YOU.

I am going to talk a bit more specifically about my state, California, however keep in mind that many states also require a variety of disclosures and these are regulated by state law (there are also federal disclosures, such as lead paint). There are typically forms to be used for these disclosures, and you can get in a lot of hot water by failure to disclose relevant information.

The CA form is called the Transfer Disclosure Statement  (TDS) and it is required in most cases of property transfer of 1 - 4 units (there are some exceptions, such as transfer from one spouse to another). This form  MUST be completed by the seller, NOT the agent (if you cannot complete the form you will need to arrange for someone to do so - the agent is forbidden from doing this).  The purpose is to share the seller's knowledge about the home's conditions, systems, defects, etc. that may impact the sale. Failure to disclosure relevant information can result in a transaction falling apart, and buyers have successfully sued sellers to failure to disclose certain information about a home (e.g., suppose you know there is a roof leak). It's fine to say you are not sure, in answer to a question, but to say NO when you know there are, or have been, issues can get you into legal trouble. And buyers have a right to know about these issues, although it is expected that they will conduct their own due diligence through home and other inspections, and to review all the disclosures that are required by law.

There are other disclosures you will come across that you will need to make - federal, state and local (e.g., strapping on hot water heaters in the event of earthquakes; lead paint; mold; smoke detectors). In addition , there may be information that you should disclose that may not be asked about on a form. Better safe than sorry - it's best to disclose. Your agent can advise you on the relevance of issues that may arise.

Are you confused by the terms you hear floating around the real estate business - listing agent, selling agent, dual agent, buyer agent? I'm not surprised. They can be confusing to us agents as well, and there are those in the industry who use them in different ways and to mean different things. And some, unfortunately, do not understand the nature, and importance, of the different roles these relationships should have for you, the consumer.

I want to clarify things a bit, but don't worry so much about the terms. What is important to understand are the relationships that you can have with a licensed agent since THAT impacts the transaction, and affects YOUR INTERESTS.

Listing Agent refers to the individual (through a brokerage) that has a signed contract with a seller to list and market that home. That person REPRESENTS THE SELLER.

Buyer Agent is an agent who has agreed to REPRESENT THE BUYER - his or her interests, with fiduciary responsibilities, honesty, loyalty and more. DO NOT assume that the agent you decide to work with is representing YOU, the BUYER unless you ask. While that person is helping you, they may be working on behalf of the seller. Any good agent will explain the differences to you without you asking. But if not, ASK THEM! Don't make assumptions - they can bite you.

A Dual Agent is one who REPRESENTS THE BUYER AND THE SELLER, ostensibly. ALL parties MUST agree to this. However, it is impossible to truly represent BOTH PARTIES. It can't be done. How can an agent truly represent your best interests as the buyer when they are in conflict (e.g., price, concessions, repairs) with those of the seller?Consider this role very carefully. Are you really comfortable being in that type of relationship? You DO have a choice.

A selling agent is generally considered to be the person who brings in the buyer (i.e., they "sell" the home). This person could be the listing agent, a buyer agent, or a sub-agent (an agent who is representing the seller but working with the buyer - it could be a person in the same brokerage or someone else).

If you are buying AND selling, your listing agent can also act as a buyer agent for you in your purchase transaction. However, since they know alot about you as your listing agent, you would NOT want them to act on behalf of the sellers in your purchase - they need to represent YOU.

Knowing the relationships you have with a particular agent is what is important, not the title. And many states have disclosure forms you must review and acknowledge so you understand the possible relationships.

And know that state laws may define these differently. Some areas do not allow dual agency, and so on.