Staron Real Estate Blog

Transfer Disclosure Statement (TDS):
A Powerful Disclosure/Negotiation Tool

Unless exempt, Seller has a statutory and contractual obligation to answer every question on the TDS on a transfer of a residential 1-4 unit property.

Receipt of TDS cannot be waived by Buyer.

TDS gives the buyer a right to cancel the contract within three (3) days of receipt of TDS if delivered in person or five (5) days if mailed or delivered by any other means than in person.

Some Exemptions:
Where public reports is required; Probate or bankruptcy sales;
Transfer by conservator or guardian; Transfer form one co-owner to another; Transfer from spouse, child, grandchild, or grandparent;
Transfer by a deed in lieu of foreclosure or REO;
Transfer to/from government entities; Some transfer by a trustee in the administration of a trust.

When All Contingencies Removed:
TDS cancellation right is relevant when a Buyer has removed all contingencies but Seller makes a subsequent or amended disclosure because he/she has discovered material facts affecting the property or due to a material inaccuracy in original disclosure. Buyer then has a right to cancel within the 3-5 day time frame and be entitled to return of their deposit. Even if Buyer has not removed contingencies, an amendment in the disclosure could extend the Buyer s contingency time frame. (See Paragraph 10.A(7) and Paragraph 14A(3) of RPA-CA.)

Non-Contingent Offers:
TDS cancellation is important in non-contingent offers. Where offer has no contingencies and Buyer received TDS after writing the offer, Buyer has 3-5 days to cancel and is entitled to return of their deposit. To avoid giving Buyer the right to cancel based on the disclosure, TDS has to be delivered and receipt acknowledged prior to Buyer writing their offer.

Wagle, The Importance of the Transfer Disclosure Statement, (2015), California Real Estate, May, 2015 Issue, Volume 95, Number 3, Page 10.

Effective Negotiation Tools in a Competitive Market

Make sure your negotiating tools match that of your client’s preferences, which may mean being more formal.

Do not text during an ongoing negotiation. Always chose to pick up the phone as texts are often misinterpreted and too informal.

Do not ask open ended questions, this will only add stress to any tough situation. Give your client three options on how to proceed.

Do your homework beforehand. If you know a house has a major defect that will be discovered during inspection, get a quote for the repair before you get into negotiations about any credits. This may help reduce the buyer’s demand.

Never speak for your client. When speaking to the other party, always say that "your client has instructed you to handle it this way" so that if they change their mind, you do not undermine your position and lose the other party’s respect. Olson, (2015) The Negotiation Dance, Realtor, Sep/Oct Issue, p. 54

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March 27, 2014

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