Understanding the language used in real estate, especially abbreviations, can be confusing. Here’s another bit of lingo, AND a critical document your should know about – the Seller’s Real Estate Transfer Disclosure Statement (TDS).
Once your offer has been accepted there is a period of intense due diligence or investigation about the house you are buying. All this has to be done within the time frames spelled out in your Offer to Purchase (known as the RPA or Residential Offer to Purchase Agreement here in California), typically 17 calendar days following acceptance of the contract.
Due Diligence is an important part of how to buy a home (check out video series on my YouTube Channel – about 20 short videos to help buyers buy a home).
Part of that due diligence is a review of the seller disclosures, many of which are mandatory here in California. One document that can be particularly informative is the Real Estate Transfer Disclosures Statement, otherwise known as the TDS (you are likely to hear all kinds of acronyms for the real estate transaction forms – I’ll share more in the future!).
Most seller disclosures are boilerplate informational forms that simply need to be reviewed and signed to acknowledge receipt, however the TDS is completed by hand by the seller.
The Real Estate Transfer Disclosure Statement is a summary of the condition of the property, where the seller is required to provide information about the features of the home (e.g., appliances, garages, sprinklers, heating, AC, water heater, dishwasher), as well as disclose any issues, defects, repairs, and other matters associated with the home and yard to the best of their knowledge. Any items checked “yes” by the seller are to be further explained (e.g., a roof leak that was repaired), and may suggest further questioning or investigation by you and perhaps an appropriate inspector.
The TDS is NOT a substitute for a quality home inspection, but is intended to provide meaningful disclosure to you from the seller (who may or may not live there) about the property. As mentioned, the TSD is also useful for suggesting other issues for you should inquire about (read about other inspections a buyer might want to have).
The TDS is a required document for most types of real estate transactions involving real property of 1 to 4 dwelling units, with some exceptions (e.g., foreclosures, transfers from one co-owner to another, new homes, transfers from one spouse to another).
As with other seller disclosures, once you have reviewed the TDS you will need to initial and sign where requested to acknowledge that you have seen it.