Recording-2025-03-13T12:53:33.368Z

Property Disclosure Basics

• Virginia Residential Property Disclosure Act: Imposes obligations on sellers and their agents to disclose property conditions to potential buyers.

  • Fiduciary Duty: Agents must disclose any known issues about the property.

  • Disclosure Acknowledgment Form: Sellers must provide a form that acknowledges their obligation to disclose information about the property, which must be signed by purchasers.

• What Must Be Disclosed:

  • Any material defects known to the seller, such as leaks or structural issues.

  • Flood risk information can also be disclosed using forms available from the Virginia Board.

Scope of the Disclosure Act

• Applies to Properties: One to four unit residential properties only.

  • Exclusions:

    • Foreclosures (no seller to disclose information).

    • Eminent domain, bankruptcies, estate settlements, new constructions, divorce settlements, and family endowments.

Buyer Responsibilities

• Due Diligence: Buyers are advised to perform their own inspections and research, commonly referred to as "Buyer Beware."

  • Home Inspections: Buyers should always strive to have property inspections done to avoid unexpected repairs.

• **The Concept of Stigmatized Properties: Virginia does not require disclosure for properties considered stigmatized (e.g., homes where a crime occurred).

Resale Certificates & HOAs

• Resale Certificate: A vital document provided by the Homeowners Association (HOA) containing:

  • Compliance reports, financial statements, and guidelines for the community (do’s and don’ts).

• Mandatory Nature: Resale certificates cannot be waived and must be reviewed typically within three days of receipt by the buyer.

• Optional Contingencies: Home inspections and appraisals are optional contingencies in contracts, unlike resale certificates which are mandatory.

Disclosure Timing and Requirements

• Timing: Required disclosures must be made before entering into a ratified contract.

  • If disclosures come after ratification, buyers may have the right to terminate the contract.

• Permissible Disclosures: The seller does not need to disclose items like nearby military bases or tourist activities unless they actively affect the property.

Fair Housing Considerations

• Megan's Law: While not required to provide information on sex offenders nearby, such information is accessible through state databases for buyers' own research.

• Independent Research: Buyers are responsible for researching nearby flood zones and any other issues that may affect their living conditions.

Agency Relationships & Terms

• Agency vs. Customer Roles: A licensee (agent) represents clients based on expressed authority. Clients engage in deeper relationships with agents, while customers only receive basic services.

  • Standard vs. Limited Service Agents:

    • Standard agents handle everything in the home buying/selling process.

    • Limited service agents may merely list properties without engaging in negotiation or extensive service.

• Agreement Types: Contracts must be signed by the brokerage rather than by individual agents; agents act under the brokerage's authority.

Navigating Contracts and Fees

• Payment Structure: Commissions must be disclosed and cannot be adjusted without client consent. Payments are made from the title company to the brokerage, which then pays the agent.

• Common Issues: Miscommunication and misrepresentation can arise; agents must ensure clarity and honesty in transactions.

Conclusion on Best Practices

• Coaching Importance: New agents should seek brokerages that provide solid training and support to ensure successful practices.

  • Agents must understand their roles, responsibilities, and legal obligations in the real estate market to maintain compliance and professionalism.