Sample language for Agent's Visual Inspection Statements & the TDS

By
Real Estate Agent with Zephyr Real Estate, San Francisco BRE# 01265683
http://actvra.in/4hVc

Risk Management ... (and the TDS)

Sample Language for Agent's Visual Inspection Statement.

As much as I like to think I know it all, there's always something to be learned, (or at the very least..."reminded"), when it comes to disclosure and the infamous [TDS]Transfer Disclosure Statement (aka: the C.Y.A document!)  Knowing what to say and more importantly, How to say it, can separate a clean form of disclosure from a potentially litigious one.

Here in California, Agents are required to do a visual inspection for each property they have in contract.  This applies to the selling agent as well as the listing agent, and is sub-section of the seller's TDS form.  Overkill?  Perhaps. Regardless, it's mandatory.  To make it fair, there are disclaimers on the AVIS  (Agent's Visual Inspection Statement) form addressing the fact that it is a "visual" inspection only... with reference to the fact that the agent is not acting in an "expert" capacity.  As such, the language we use when making note of defects, issues, or when giving recommendations, has to be worded carefully to avoid the appearance of acting as an "expert"...kind of like giving legal advice when you're not in a position to do so.  A tightrope walk?  You bet.

Some common examples are when you make note that there are cracks in the sidewalk, on the ceiling, or along the foundation.  You simply say: "cracks noted on ceiling in living room (sidewalk, foundation near garage door, etc.).  You DON'T say: "cracks noted along ceiling (sidewalk, foundation, etc.) due to settlement.  Although that might be the logical explanation for what caused those cracks, you can't be certain.  You just have to note what you see and leave it at that.

Here are a few sample statements agents can use (when appropriate) for providing additional disclosure in their visual  inspections or supplemental TDS summaries.  While some of these are more specific to San Francisco, the general concept is there and can be applied universally.  Also, when I see something of particular interest that perhaps an inspector may have missed, I make it my duty to point it our to the client.  While some of the statements below may appear to be "obvious" and more a matter of common sense, it's always better to assume that they're not so obvious.

_______________________________________________________

 

STANDARD AGENT TDS LANGUAGE:

A.  Personal property may cover unknown damage, such as holes in finishes, or stains on wood floors or wall to wall carpet. Personal property was not moved to conduct this visual inspection. There may be areas that cannot be viewed as of this inspection including but not limited to sheds, cluttered areas, roof, crawl space, sewer laterals and fireplaces. Windows have not been tested to confirm that they are fully functioning.

B.  Fitted carpets conceal floors in some rooms. The condition and type of floor is unknown.

C.  Agent notes after artwork, furniture, drapes, and/or rugs are removed, defects such as cracks, stains, peeling,
nail holes, and areas of fading or discoloration
may be apparent.

D.  If this property contains a power operated garage door opener, buyers may feel or hear the operation of this
opener, which
may affect their quiet enjoyment of the property.
cracked sidewalk
E.  In San Francisco, the concrete sidewalk flags in front of or surrounding a property are the building owner's responsibility. If they are cracked, lifted, buckled, or damaged in any way, the city can require immediate replacement at the building owner's expense.

F.  If buyers are interested in further developing or improving the property, they are encouraged to contact the (insert City) Planning and Building Departments to better understand the limitations or processes and whether it is possible to determine if they can develop, improve, or expand the property

G.  Neither the seller nor the broker can guarantee that the view which exists today will remain unobstructed in the future.

H.  Buyers are advised to contact the police department to check crime statistics in the neighborhood. San Francisco crime statistics can be found at www.sfgov.org/site/police. There may be other places where statistics can be found.

I.  Buyers are strongly encouraged to thoroughly read and understand "GENERAL INFORMATION FOR BUYERS AND SELLERS OF RESIDENTIAL REAL PROPERTY IN THE CITY AND COUNTY OF SAN FRANCISCO." This document covers many manhole coverpertinent topics and conditions that are relevant to purchasing a home in  San Francisco.

J.  Many sewer mains in San Francisco are old enough to have been constructed using ceramic material. Over time, this material is frequently subject to breakage from shifting or settling soil as well as earthquakes. Most plumbing companies offer a service that includes the videotaping of the line to determine if blockage or breakage exists and this type of inspection is recommended.

K.  Materials used in the construction of fireplaces and related exhaust flues are frequently subject to breakage, as well as the accumulation of flammable residue. Buyers are encouraged to have an inspection to determine the usability of existing fireplaces.

L. Many properties in San Francisco are located in densely populated and frequently traveled areas, and are subject to  traffic, noise, the presence of homelessness and other common characteristics of urban life.  Buyers are advised to visit the location of their intended purchase onnoisy traffic different days of the week and different hours of the day to determine if the location is suitable for them.

STANDARD AGENT TDS LANGUAGE FOR CONDOMINIUMS, T.I.C.'s, ETC.:

M.  If this property contains an elevator, or the building contains an elevator, buyers may feel or hear the operation of the elevator which may affect their quiet enjoyment of the property.

N.  The subject property is a condominium and therefore owners will be members of a homeowners' association. Common areas and the building structure are owned with other association members/condominium owners.  Repair or replacement of building components requires neighbor cooperation. In a common living situation such as this, noise between units is common and to be expected. (If applicable).

Posted by

  David Ames   

 

  DavidAmes@zephyrsf.com

  (415) 271-2071

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Inna Ivchenko 07/18/2014 02:53 AM
Topic:
Home Selling
Location:
California San Francisco County San Francisco
Groups:
San Francisco Real Estate
Tags:
san francisco living
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risk management
transfer disclosure statement

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Rainer
369,954
Tish Lloyd
BlueCoast Realty Corporation - Wilmington, NC
Broker - Wilmington NC and Surrounding Beaches

Goodness, David, I thought we had some rather unusual practices here in North Carolina -- hope the Agent's Visual Inspection Statements and the TDS skip us completely.  Excellent advice, however, for agents in your area.

June 14, 2011 07:32 PM #1
Ambassador
1,238,543
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale - Probate Specialist

David, As a California Real Estate broker/agent I am all too familiar with the TDS and AVID. I like Paragraph G. Neither the seller nor the broker can guarantee that the view which exists today will remain unobstructed in the future. Adding further … view and/or environment. You neighbors beige home could be bright green or yellow tomorrow. How about those barking dogs. Gheez, it simply doesn’t end … does it! Buyer Beware!

June 14, 2011 08:30 PM #2
Rainmaker
238,453
David Ames
Zephyr Real Estate, San Francisco - San Francisco, CA
San Francisco

I hope you don't have to "go there" either, Tish.  If you do, I guarantee it'll be a result of too many lawsuits in the area/State.

Well said Kathleen.  We pump our clients with so much disclosure all the time, it's no wonder when they begin to glaze over.  LOL on the change of paint colors.  I'll have to add that one to the list.

June 14, 2011 08:43 PM #3
Rainmaker
1,395,260
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

Ah yes, the dreaded lawsuits that make this type of thing necessary Mr. Ames.  You've got quite an extensive list going here...........seems like awfully good advice too. 

June 14, 2011 09:31 PM #4
Rainmaker
577,703
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

David,

This was excellent!  You definitely have much more to think about there in San Francisco.  We have some older homes in Sacramento of course but the majority of the homes here in El Dorado Hills were built in the mid 1960's and since.  A biggy for us is lead based paint!

June 14, 2011 10:23 PM #5
Rainmaker
245,815
John M. Scott
BRE # 01442690, Scott Keys Properties - San Francisco, CA
Broker / Owner San Francisco Bay Area

David, excellent post! I'm going to share it with ALL my agents. As an aside, the City went thru many blocks of West Portal last year, marking portions of sidewalks that needed to be replaced. The woman on the corner of Lenox and Taraval must have had 50% of her sidewalk marked. But then over here east of Claremont, no City inspectors. Maybe the City ran out of money??

June 14, 2011 10:38 PM #6
Rainmaker
238,346
Peggy Hughes
PHA/Peggy Hughes Associates - Professional Moving Organizer - San Francisco, CA
SF NYC LA

As a former insurance broker... I can definitely understand the need for complete information... as a consumer, my first thought is OVERKILL, as an SF resident and understanding our crazy City... totally get it!

June 14, 2011 11:09 PM #7
Rainmaker
238,453
David Ames
Zephyr Real Estate, San Francisco - San Francisco, CA
San Francisco

Thanks Roger.  Although some of it borders on the ridiculous, it helps the buyer to mentally prepare for "unexpected" surprises later.  Like Kathleen said, 'Buyer beware'.

Hey DeeDee...it seems like a lot sometimes, but we're all used to it.  Speaking of lead based paint, I remember a client who "demo'ed" the interior of an old Victorian and saved a piece of wall to show me the 20+ layers of paint that had accumulated over the decades.  You gotta figure at least 3 quarters of them were lead based!

Thank you John, and yes...feel free to share!  Funny you should mention the sidewalks.  My neighborhood was completely tagged last year, and I live on a corner.  They tagged enough squares at my place to bring my total replacement cost to about $3K!  We're all pretty sure it was a racket for the City to collect revenue on permit applications, (especially when you consider what they tagged).

Peggy ~ Gotta love the attorneys in town...(kind of like DPT: when your driveway is blocked, you're glad they're around to have "the bastard" towed, but when you're 30 seconds late to feed the meter, you want to kill them).

 

 

June 15, 2011 12:38 AM #8
Rainmaker
883,052
Jane Peters
Power Brokers Int'l - Los Angeles, CA
Connecting you to the L.A. real estate scene

Oh my.  Are you kidding....  You mean the AVID filled out with crack in ceiling in 2nd bathroom.  Is not enough?  This is amazing stuff.  I am furiously taking notes.

June 15, 2011 01:37 AM #9
Rainmaker
238,453
David Ames
Zephyr Real Estate, San Francisco - San Francisco, CA
San Francisco

LOL Jane...I thing "crack in ceiling in 2nd bathroom" is good enough in the majority of cases.  Sometimes, these come in handy when the situation calls for it. 

June 15, 2011 02:35 AM #10
Ambassador
625,691
Doug Rogers
Bayou Properties Realty - Pineville, LA
Your Pineville Louisiana Agent

Seems like California is asking agents to act well beyond their expertise. I can understand the benefit, keeping agents from blindly writing offers on homes they have not seen, but I would NEVER even act like a home inspector.

June 15, 2011 09:33 AM #11
Rainmaker
648,060
Evelyn Kennedy
Gallagher & Lindsey, Alameda, California - Alameda, CA
Alameda, Real Estate, Alameda, CA

David:

I am bookmarking your blog.  I usually take many hours to fill out my AVID and still worry if I have missed something.  It is nice to have a template to make my job easier.

June 15, 2011 11:42 AM #12
Rainmaker
238,453
David Ames
Zephyr Real Estate, San Francisco - San Francisco, CA
San Francisco

It does seem that way, Doug.  The only part of the equation that seems to make sense is looking at it from a "policing" standpoint (assuming the seller will "miss" something in their disclosure forcing the agents to be third party eyes and provide a sort of "checks and balances" concept).  The irony is that there is already a plethora of standard disclosures addressing the "buyer beware" concept of purchasing property.

I hope you find it useful Evelyn...and maybe it will help reduce the amount of time spent filling this form out.  :-)  When SFAR switched over to Instanet Solutions as their electronic forms provider, they changed the acronym from AVID to AVIS (s = statement).  We all still call it the AVID, lol.

June 15, 2011 12:53 PM #13
Rainmaker
630,861
Liz Wallace
Century 21 Sherlock Homes - Rockville Centre, NY
Broker C21 Sherlock Homes, Rockville Centre, LI, N

Oh Lord I thought being a Realtor in NY was tough, I hope the NY Dept of State never ever speaks to anyone in California.  This old dog has learned way too many new tricks.

June 15, 2011 02:52 PM #14
Rainmaker
564,383
Diane McDermott
Realtor®, GRI, Landis e2 Real Estate, LLC - Charlotte, NC
Charlotte NC Real Estate Market

All I can say is WOW, things are definitely unique in California!  Reminds me of a story where buyers were irate after buying a beachfront house...because the sound of the ocean kept them up at night.  Ummm, seriously?!?!

June 15, 2011 04:23 PM #15
Rainmaker
238,453
David Ames
Zephyr Real Estate, San Francisco - San Francisco, CA
San Francisco

Mums the word Liz!  ;-)

Diane ~ Good grief.  THAT'S one for the books!  I suppose it they had purchased somewhere "inland" (instead), then a wave "sound" machine for night time bliss would have been an inappropriate closing gift.

June 15, 2011 06:35 PM #16
Rainmaker
238,453
David Ames
Zephyr Real Estate, San Francisco - San Francisco, CA
San Francisco

I discovered some notes from a seminar held a few months back that might also be helpful when deciding what to say, when to say it, and HOW to say it:

Robert Brand Risk Management
SEMINAR NOTES
Two fundamental principles of disclosure:
• "The only buyers who sue are surprised buyers." During a visual inspection,
agents should ask "will the buyers be surprised about this property condition?" If
the answer is yes, then they should disclose it.
• "Point it out, do not figure it out." Agents should bring a property condition of
concern to the client's attention, but should not diagnose the issue. So, "stain
noted at ceiling due to roof leak" becomes simply "stain noted at ceiling."
• Document significant text messages with a printed email.
• If cell phone reception is sketchy, consider verbally advising buyer, and confirming that
with a note in the transaction file.
• Sample wording for building permit issues:
"Buyer is encouraged check with local municipality regarding building permit issues."
• For a "trashed out" house, consider at least disclosing: "Deferred maintenance noted
throughout the property" and then list the observed material issues (which is generally
a short list). Close with "I suggest the client obtain the services of a professional home
inspector."
• For an "unlivable" house, consider also disclosing: "Extensive disrepair noted
throughout the property."
• Replace numbers with the optional word "some." Example: rather than "12 cracks
noted at exterior siding" disclose "Some cracks noted at exterior siding."
• When a room is extremely cluttered, consider disclosing: "Extensive personal
belongings prohibited a visual inspection of this area."
• When noticing an unpleasant odor in the home, consider disclosing "Obvious odor
noted." Do not diagnose the issue.
• Check with company management regarding policies concerning the disclosure of
neighbor hearsay, and also the disclosure of nearby half-way houses. Opinions and
procedures vary in these two areas.
• Remember that all disclosure requirements remain the same for all parties in "As Is"
transactions.
• It is generally best if agents do not take pictures, videotape, or record (tape or digital)
conversations in standard transactions. Check with company management for policy
on this issue.
• When completing a disclosure form (TDS or AVID, etc.), agents should refrain from using
adjectives. So, "3 large setting cracks noted above fireplace" becomes "Cracks noted
above fireplace."
• Avoid advertising that the house is “Certified Green” or other similar descriptions.
• Do not use superlative words (totally, completely, thoroughly, etc.) in either disclosure
or real estate advertising.
• Keep in mind that the word “visual” in the TDS can be interpreted as “any visual
perception”
• If using the AVID, do not write disclosures on the TDS – instead check off the “See
attached Agent Visual Inspection Disclosure Form” box on the TDS form (section 3 or 4).
For REO transactions:
• Keep in mind that several disclosure requirements do apply to banks.
• It can be helpful to provide the bank seller with the California Association of Realtors’
publication “REO Disclosure Chart” – and to document the provision of that publication.
For Short Sale transactions:
• Normal “red flag” disclosure requirements remain essentially unchanged; agents,
however, should be extra careful and focused in fulfilling this responsibility.
Clear all disclosures with a qualified attorney.
March 25, 2011

June 16, 2011 07:22 PM #17
Rainmaker
238,453
David Ames
Zephyr Real Estate, San Francisco - San Francisco, CA
San Francisco

Hi Inna.  Actually, the repost feature should be active.  Or just cut and paste if you like.  :-)

May 19, 2012 02:56 PM #18
Rainmaker
307,946
Inna Ivchenko
Mannis Real Estate Group - Calabasas, CA
Los Angeles / Valley Homes

Oh my, David.

I wrote a lot of AVIDs but never thought I need to mention how noisy can be a garage door. Hmmm... How about washer/dryer and dishwasher, they might '' affect their quiet enjoyment of the property''.

 #Only_in_California:)

July 18, 2014 02:31 AM #19
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Rainmaker
238,453

David Ames

San Francisco
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