When you list or buy a property there are A LOT of forms that have to be prepared and signed. This is a legal procedure and the contracts and forms are what insures that all parties are clear in the expectations.
When I list a property, one of the first things I present to my sellers is “Homework Package”. In this package I include some seller disclosures. These forms are required to be completed by all sellers (even For Sale By Owners).
RPOD-Residential Property Owners Disclosure
The first form in the packet is the RPOD. This answers some basic questions about the house, that the home owner would know. Things like the age of the roof, plumbing and HVAC systems are included in this questionnaire. Often times buyers will use this disclosure to help make decisions on the purchase of the home and can be informative.
MOG-Mineral Oil and Gas Rights
When you own a piece of property you own it to the core of the earth to the top of the sky and everything in between. You also own any “improvements” attached to the land. These become Real Property (see episode 24) and convey with the sell. Something else that conveys is the mineral, oil and gas that are part of the property. The MOG disclosure just states that the rights to those haven’t been severed (given away) by you or a previous owner
Lead Based Paint
If the home in question was built prior to 1978 a lead based paint disclosure is required. Lead based paint can be dangerous to the potential buyers and they would want to know if the current owners are aware of the existence of this dangerous condition.
Caveat Emptor (Buyer beware)
NC is a Caveat Emptor state….buyer beware. While the sellers can’t go completely rogue lie or embellish details of the home (called misrepresentation), it’s the responsibility of the buyers to do their inspections and discover defects and details about the home that may impact their decision to continue through to the closing table.
When the sellers are completing the forms, they may have 3 options for answering…YES…NO….NO REPRESENTATION. The latter, is basically the seller telling the buyers “I am not answering the question. Buyers should do their own inspections”.
Because we do live in a litigious society, it has become very common for a seller to choose “no representation” whenever possible. This doesn’t necessarily mean there are issues, just the seller is using the form to protect themselves. It’s also very common on property that hasn’t been a primary resident of the home. Its just hard to answer questions on a home that you don’t have direct knowledge of.
Why you need a good agent?
These forms, while not terribly confusing, do create some questions and thats just one of the many reasons you need a high quality agent with the ability to teach and guide you through the process (Hey….I know a guy!) The disclosures are a big part of the process and you want to make sure you do what you can to properly inform buyers and protect your self as much as possible.
There’s more coming soon in this series. Stay tuned (and please share with your friends and family who need real estate answers)
Inner Banks Real Estate