Derek Morgan
Derek Morgan
Derek Morgan
Derek Morgan

    Real Estate Disclosures

    When it comes to buying or selling a home, there are a lot of moving parts. One of the most important pieces of the puzzle is the real estate disclosure process. These disclosures are designed to give buyers all the information they need to make an informed decision about the property they're interested in. In this blog post, we'll take a closer look at the most common disclosures in real estate, and give you some tips on how to navigate the process.

    Real Estate Disclosure Process Overview

    The real estate disclosure process begins after escrow is open and the initial deposit is made. At this point, the buyer will have the opportunity to review and sign off on all disclosures. This gives the buyer the chance to learn everything there is to know about the property and its surroundings, so they can make a well-informed decision.

    It's important to note that the seller is required to be honest about the house and its conditions. They need to include details about any renovations, damages, or other pertinent information that could impact the safety of the home and its occupants. This is known as the seller's disclosure.

    During the disclosure signing, the buyer reviews and signs off on all disclosures. By doing so, the buyer is accepting that they are comfortable with everything they have found out about the house at this point. If the buyer is unhappy with the conditions revealed, they should not sign yet. This is the moment to determine if there is a way to address the issue or if the home sale will be canceled.

    It's also important to note that if the buyer ignores information in the disclosure and is upset with it later, the seller is protected from any legal action.  So it's crucial for both buyers and sellers to be honest and transparent throughout the entire process.

    Importance of Understanding Disclosures

    The information that comes out of the residential property disclosure process is really beneficial! Home buyers get to find out essential facts about their new home. In a way, it reminds sellers they must be truthful and that there are legal consequences if they are not. It's essential for both buyers and sellers to understand the disclosures to ensure a smooth process.

    In particular, understanding disclosures allows buyers to negotiate fixes for problems or issues that come up. For example, if a buyer discovers a problem with the property, they may ask for money or credit from the seller to address it. Additionally, if the disclosures reveal something unfavorable about the property, the buyer has the opportunity to walk on the offer if no deal can be reached. 

    It's also worth noting that understanding disclosures can also help to avoid lawsuits for either party. If home sellers and buyers do not properly communicate at the disclosure stage, there may be an escrow failure around the corner. 

    Most Common Disclosures in Real Estate

    Disclosures in real estate vary greatly based on property type and location of property. This is because states and counties have different laws all across the country! In California in particular, there are a handful of property disclosures that are required by law.

    It's important to review the most common disclosures in real estate to prepare and get familiar with the types of disclosures you can expect! Here are five of the most common disclosures in California:

    Natural Hazards Disclosure

    First on the list is the natural hazards disclosure. Real estate brokers or sellers must disclose if a property is located at or near a state or local hazard area. Common hazards to report include earthquake faults, seismic zones, flooding, wildfires, general fire hazards, and environmental contamination. The Natural Hazards Disclosure is required by law in California to protect buyers.

    Market Conditions Advisory (MCA)

    MarketConditions Advisory, also known as MCA, covers items more financial in nature. This disclosure includes loans, appraisals, home inspection, and contingency deadlines. The goal of the MCA is to relay to the buyer any information that could impact the financing of the home. This includes information about the current market conditions, such as interest rates and home values. It's important for buyers to fully understand and review the MCA before making a final decision on a home purchase.

    Lead-Based Paint Disclosure

    The lead-based paint disclosure is a federal law requiring sellers to disclose the presence of lead-based paint in homes built before 1978. Lead-based paint can be hazardous to both children and adults, so it's crucial for buyers to be aware of this potential hazard before purchasing a home. This disclosure also includes information about any lead-based paint hazards that have been identified and repaired, or any lead-based paint hazards that have been identified but not repaired.

    Transfer Disclosure Statement (TDS)

    The Transfer Disclosure Statement (TDS) is a disclosure required by law in California. The TDS is designed to provide buyers with information about the physical condition of the property and any known defects. This disclosure is intended to help buyers understand the condition of the property they are buying and identify any potential issues that may need to be addressed.

    Megan’s Law Disclosure

    The Megan’s Law disclosure is also a requirement by law in California. This disclosure provides buyers with information about registered sex offenders in the area. This information is intended to help buyers make an informed decision about the safety of the neighborhood and any potential risks.


    Navigating the real estate disclosure process can be overwhelming, but understanding the most common disclosures in real estate can make the process much smoother. It's important for buyers and sellers to be honest and transparent throughout the process to ensure a smooth and successful transaction. Remember, if you have any questions or concerns, be sure to consult with a professional to ensure you have all the information you need to make an informed decision. Remember, it's a big purchase, so don't be afraid to ask questions, and don't be afraid to walk away if something doesn't feel right.

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