Once a property is considered a pending sale, there is much work to be done, including making appropriate disclosures. Bob Nelson, Eugene real estate investment broker with Pacwest Real Estate Investments, and Marcia Edwards, Eugene residential broker with Windermere Real Estate, continue to break down the process of a successful closing in part four of this five-part series.
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During the pending sale process, financials are reviewed, the preliminary title report is reviewed, and property is inspected. There are also disclosures that are available, or disclosures that a seller is obligated to at the time of a sale.
In the state of Oregon, whether it’s a house, duplex, three-plex, or four-plex, there’s a seller’s property disclosure form that is a requirement by law. A seller must complete this form and provide it to the buyer, notifying the buyer of everything that they’re aware of related to the property. Of course, the seller could answer, ‘I don’t know,’ to some of the questions on the form, and you just have to hope that is accurate and they’re not really saying, ‘I know a lot, but I’m not going to say anything.’”
One great benefit of the form is that it triggers the seller to think through anything that’s happened over the time of ownership. It’s easy to forget things when you don’t have receipts in front of you, but the form will help you remember that the roof did leak at one point. As the seller, it’s your obligation to share that information with the buyer—latent material defects, concerns on the property over the history, and the story that you know but they don’t. You want the buyer to understand what the condition is at the time of purchase: what “as is” actually is.
Bob Nelson, Eugene Commercial Real Estate Investment Broker:
If a buyer made an offer stating, ‘I’m buying the property in as-is condition,’ you, as a seller, need to ask the buyer once they’ve concluded their inspections to state that they affirm that they’re taking the property in as-is condition, because now they’re aware of what ‘as-is’ actually means.
It’s important that the process is timely. Buyers need to be on top of getting things started, let their inspector know about any concerns that stem from the seller’s disclosures, and make sure they understand all the aspects of the property. Once that is completed, you proceed to close of escrow, which is talking about financing. There will be an appraisal on the property to make sure that it offers sufficient collateral for the sales price, and the lender will be checking out the buyer on the sale, too.
Of course, financing is not a given. What happens if the buyer doesn’t qualify? What happens if the property doesn’t qualify? We’ll turn to that issue in part five of our series.
The Pending to Closed Sales Successfully Series is from Bob Nelson and Marcia Edwards “Real Estate Today ” Eugene, Oregon, radio show, which airs at 5:30 daily on KPNW.