Understanding Disclosures in Real Estate Transactions in Silicon Valley
Tips to Buy a Home in Silicon Valley
Spring is upon us and the real estate market in San Jose, CA is hotter than ever while inventory remains desperately low (-44% YoY). Home sellers are enjoying multiple offers which drive home prices always higher all over Silicon Valley.
For the the many home buyers out there, I thought I would share a few tips about the types of disclosures which abound in any real estate contract.
Although property disclosures might look dry and uninteresting, it is
essential that buyers read them carefully and share any concerns they might have with their real estate agent.
home sellers must disclose to a prospective buyer all known conditions
(aka material facts) about a property that may adversely affect its
desirability or value.
Material facts include information about the physical aspects and
condition of improvements on the property, natural hazards affecting the
location of the property, environmental hazards on or near the
property, property title covenants, conditions and restrictions
(CC&Rs), use of the property as well as the area surrounding the
property’s location and the suitability and zoning of the property.
The existence of a hazard due to the geographic location of a
residential property (aka as a natural hazard) should be carefully
considered. A natural hazard does not include man-made aspects of the
property. Locations where a property might be subject to natural hazards
include special flood hazard areas, potential flooding and inundation
areas, very high fire hazard severity zones, wild land fire areas,
earthquake fault zones and seismic hazard zones.
Environmental hazards are man-made hazards, not natural hazards.
Environmental hazards are classified as either "injurious" to the health
of humans or as an interference with an individual’s sensitivities
Environmental hazards can be located on the property
or off the property.
Environmental hazards located on the property which pose a
direct health threat to occupants include in particular asbestos,
insulation, materials, toxic and corrosive materials, products or
substances, toxic mold and lead.
Note that for residential properties
constructed before 1978, the seller’s agent needs to deliver to the
buyer the federal lead-based paint disclosure.
Environmental hazards located off the property typically
include noise, vibrations, odors, airborne particles, military ordnance
sites within one mile of the property, industrial zoning in the
neighborhood of the property, airport influence areas and ground
transportation arteries which include train tracks and major highways in
close proximity to the property.
Home buyers in Silicon Valley, you have been warned! Do not overlook these disclosures that may impact your bargaining power more than you think, which is what you might just need in this real estate market to close a deal.