Disclosures Discussion with Breanna Rutherford

In this podcast, Fred, Misty, and Brianna discuss disclosures.

Okay, so I was talking, I was talking to Brianna the other day, and I was telling her what happens in the state of Pennsylvania in terms of documentation. So we have to give the consumer a consumer notice ahead of time when we first start talking to them in-depth about real estate. And then when they see a property, there might be a seller disclosure, that’s about three pages long of things the seller knows about the property or doesn’t know. And then the agreement to buy the property. And that’s pretty much it. I mean, you have some federal disclosures like lead base paint, things like that, which you have to have. But that’s basically all it is. And if you need anything extra, you just do an addendum. In California, though, basically, Pennsylvania, you could do it blindfolded in California, we need a specialist, we need somebody who knows all this stuff, every piece of paper, you there’s going to be so much stuff 98% of it is completely irrelevant, but because of lawsuits and etc, etc. and state rules and local waitress, she tells you some of this stuff, they disclose to you. It’s awesome. So without further ado, let me bring Brianna Rutherford in. I mean, you’ve been with me, what about since 2014 201515? Something like that? The beginning of Arrivva?

Breanna 2:25
Yeah. Since right after? Well, I interviewed when I was pregnant with my oldest son. And he settled now. That’s about Yeah, 2013 2014, or something like that.


Breanna 2:43
I’ve seen it all. Yeah, I was a licensed real estate agent. And did that for a while I got into the business, of course, in 2011, when it was horrible. And so did that for a year. And then I transitioned into being a transaction coordinator. And I got certified with the state of California to do that. And I’ve been doing that since then. So yes. Pennsylvania, very easy and comparison. In California, there’s, I mean, I don’t think I’ve ever seen or been a part of a transaction that has less than, you know, 300 pages of information.

Fred 3:32
Or seller, right? Correct. Either way. Yeah. Everything basically?

Breanna 3:42
I would say the main, the main main disclosures, if there’s so many little offshoots of them, but some of the main disclosures are one we call the TDs for short. But that is actually just the real estate transfer disclosure disclosure statement. So this is going to be what a seller fills out for you. For the agent for themselves. And you I mean, the buyer, that tells you everything they possibly can. That car has come up with car California Association of Realtors. What isn’t that a

Fred 4:25
state form? Isn’t this a state-mandated form not a car form per se, the TDs, and the U.

Breanna 4:33
So they are but cars the one that decides sort of in conjunction with them to go on it?

Fred 4:41
Right because they’re in charge of the paperwork?

Breanna 4:43
Right, exactly. So yeah, this is the one that talks about everything from you know what’s included. Do you have a kitchen sink? Do you have you know, a washer and dryer? Do you have a water heater? Which you have to and then it goes into things about your sprinkler system? If you’ve redone anything in your house, your windows, are there other noisy neighbors or dogs next door to you.

Fred 5:15
Good that, you know, that brings us up. I just want to interject that we have a client right now who’s actually moving because of a barking dog. So, are they if they’re thinking about selling the house, they got to put there’s a barking dog?

Breanna 5:27
Absolutely. Right on the property. Yeah, I have done so many transactions. And I just have to say advice. For sellers, disclose every loss, disclose, disclose don’t!

Fred 5:45
This is the stupidest thing you can do is lie or misrepresent, right?

Breanna 5:54
Right? Or, or just think like, Oh, yeah, I’m just gonna fill this out. And what I mean, just what happens if they misrepresent? What’s the consequence?

Fred 6:05
Well, let’s say they forget to tell you that there’s this massive plumbing leak that they had, and they never really got it fixed. And it’s underneath the house, and the inspector can’t get to the figure, oh, we want to tell anybody, then they find out about it two years later, Eli comes after them, and tortures them. And it’s considered fraud, and it’s deception. And the real estate agent gets sued. And then they get and go to the hoochie watchi, the, you know, insurance. And that’s how, and that’s my whole point of if you’re going to list or use somebody ask them about their E & O insurance claims. And you’ll see, it’s like, going, yeah, it’s just stupid to do but move on.

Breanna 6:51
So there’s, there’s another one called an SB Q, which is a seller property questionnaire. And that is a little bit more detailed, and goes into a little bit more specifics about some of the disclosures about your property. And this, also, these two forms are great for buyers, because this is what gives buyers a heads up about what’s going on with the property. Because whether you, you know, whatever your situation is, there’s always something going on with a property. So you have to have that information going in, because that affects everything that affects the price of the house and etc, etc. Negotiating.

Fred 7:40
Exactly. And that’s, that’s the problem between northern and southern California at the time of this podcast, so many, most of the agents in Southern California will not give you anything, they won’t give you the either one of those forms ahead of time until you sign an agreement, because in the old school ways of selling to people, oh, let them sign the agreement, then they’re emotionally involved and blah, blah, blah, well, guess what? You know, those days are over, stop it. This is why when we list your property, everything’s prepared. I don’t let it go on until everything is done, because it’s crazy. Just let everybody know everything upfront, they’re going to find out anyway. Because their idea under their idea you got you got to negotiate twice. It’s crickets. It’s Cuckoo.

Breanna 8:27
Yeah, it’s one of those things like you want to go into any situation with the most knowledge and eyes wide open that you can, and especially real estate, because at the end of the day, these are huge investments, you know, and there is if it’s not an investment for you, and it’s more of an emotional component that matters to you know, I’m I’m a first time homeowner homeowner in the last four years, and that was monumental for us to be able to buy in the Bay Area. And so for, you know, any buyer, it’s really important. And for a seller, they’re selling and moving on to another part of their life. And, you know, if you don’t do the paperwork, right, or you don’t disclose things, that’s not a place you want to be.

Fred 9:16
Yeah, it’s just dumb. Move on. Yeah, think about doing that and coming us don’t.

Breanna 9:22
Yes, exactly. But yeah, I like to personally be the transaction manager of listings. I like to have everything already done. And so when a buyer is looking at our listing, they’re not just looking at the pictures, ooh, pretty photography. They are looking at what is actually happening. And what’s you know, going on, because some things you know, our house was a fixer-upper for some people. That’s not okay. for other people. It is so anyway, so yeah, another disclosure. What’s really um important is the NHD, which is the National Natural Hazards Disclosure.

Fred 10:08
Don’t read it, you will never move to California anywhere.

Breanna 10:16
And you’re in a fire zone, Uranus seismic zone, the whole status zone of falling.

Fred 10:28
We’re just like…

Misty 10:30
Go watch the movie. 2012. And that’s what could happen at any second in California.

Breanna 10:35
Exactly. Just assume we’re gonna fall into the Pacific Ocean at any moment. Yes, yes. And assume while it’s happening, we will be on fire.

Misty 10:44
And they’ll still charge double for the housing. Correct.

Fred 10:49
And make sure you have your surfboard handy is really, you know, the importance of

Misty 10:53
the Weezer song. It’s the Weezer Song.

Unknown Speaker 10:56
Yes, yes, absolutely. So, this is done based on where the houses and based on all these governmental reports that have been taken to survey the area. So it talks about, like we said, the zones that you’re in, and then it gets down to the city that you’re in, and the ordinances, and it talks about things like radon gas and you know, methamphetamine areas near you. And do they show you where they are? So if you want to buy meth, you can just stop by or No, that would be convenient, but they don’t. Oh, sounds like

Misty 11:41
it sounds like a very sexy document.

Breanna 11:43
Yes. It averages 52 pages. It has maps that are probably done in like 1997. Microsoft DOS, I don’t know what’s happening with the maps. They’re very old school. But it does have a summary page for you where it gives you about 10 points. Are you in a flood zone? Are you in a fire zone? Are you in a seismic zone? And is checked? Yes, no. And, yes, this can be something that is very worrisome for a lot of buyers. We actually just had one i thought was interesting. A transaction, obviously, I won’t say any names or locations. But this house had been involved in an earthquake down in Southern California, a rather famous earthquake. And these buyers were absolutely like, obsessed with the fact that this house had been involved in an earthquake, that possibly from now until the end of the universe, that there will be another earthquake, they wanted the sellers to somehow make that property not being an earthquake zone. I exaggerate a little bit, but no, they they’ve got the NHD report. And they were very, very concerned. And they almost backed out of the transaction buying this home, because of, you know, the earthquake damage from this earthquake in the early 90s. To this house, which had been remedied. And it wasn’t also significant and, and it got to its height, its crescendo, when the seller had to, you know, make a document that said, I mostly lost dishes that came out of a cabinet that was on the northwest corner of the house, you know, to that extent, is what this buyer wanted for the information. Unfortunately, we do a lot of things in real estate, we do not predict we cannot predict when a flood fire or earthquake will happen.

Misty 14:06
Can we say that at Arrivva does and that would use that as a selling point or…

Fred 14:13
Let’s hire a psychic Next, you know, I’ve always had the idea that I would hire or I’d have on be able to use someone referred who was a psychologist or psychiatrists. Because some people actually need that you’re changing venues or now it’s you’re trying to buy a house in this thing. And it’s like, okay, I’ll pay for an hour of therapy for you. Yeah, bad idea.

Breanna 14:37
It’s a good sell. Yeah,

Misty 14:38
it’d be it would set us apart.

Breanna 14:40
We need that. That was on like Donahue, back in the 80s and 90s. She had short blonde hair. She was a psychic. No, it’s Oh, I know.

Fred 14:51
What was her name? She’s got to be. It’s got to be 170 years old.

Breanna 14:55
Yeah. I just remember watching her when I was 10 homeschool?

Fred 15:03
Well, you know, it’s the same bullshit. She was just very, very, very just very, very, you know.

Breanna 15:13
Really raspy voice. Well, there’s gotta be some crowd work.

Fred 15:18
There’s got to be some millennial astrologer who Hey, you know, we can’t guarantee him, but he’s got credentials, you know? Yeah, maybe we can find somebody.

Misty 15:29
So we could offer to check the box for psychic or do you want the psychologists our you get an hour with the one I think

Fred 15:36
Yeah, exactly.

Misty 15:37
And that’ll tell us a lot about you.

Unknown Speaker 15:39
Yeah. I think if we made them take personality tests before we took them on as clients, we definitely could dodge a lot of things.

Misty 15:48
I think Fred is his own personality test. When we take on clients.

I think we’ve got that covered.

Fred 15:54
Yeah, they can deal with me, and they get me in and we’re happy. You know, I love working with people. We love to work. We like working with each other.

Breanna 16:03
Through if they can get that part. Yeah. So

Fred 16:10
yeah, go ahead. We’re getting off topic as usual. Yeah.

Breanna 16:14
So, I was just saying that’s, that’s a, that’s a big one. And it’s, it’s very difficult because there is no way to really monetize for that, in that, you know, I’ve had some transactions where they see something on the, you know, natural disclosure report and they want to then change the price, because depending on where that house says, Fred can speak to this as well, more than I can. Yeah, that doesn’t really work in California. You know, saying saying, I’m this house is in an earthquake zone, therefore, it should be less money doesn’t really work?

Fred 17:00
No, no, I mean, there is. And you’ve probably seen this, if you’re in what they call the flats, basically, between the San Francisco Bay and the mountains to the west. So all those towns Palo Alto inclusive. It basically says the NHD if there’s an earthquake, you just basically become sand. And you just get buried and

Breanna 17:22
because we back in the day, historically, they pulled it out of the bay. I used to live in Sunnyvale. So every disclosure report in Sunnyvale was like, hey, just to let you know, if there’s a major earthquake, you’re going to go back into the bay.

Fred 17:37
Exactly. You’re done. Like one of my buyers saw that freaked out, oh my god, you know, ask the seller about this. Ask,

Misty 17:45
I’ve seen a lot with with termites as well, like everyone gets super freaked out here about termites, but every single house here has termites, and it’s just like, oh, you’re gonna buy here, you got to know it’s not a big deal. It’s gonna happen, they’ve got to

Fred 17:59
learn. Here’s the reason, it never freezes here. So they never die. That’s why Becky’s three seem in the spring, you know, but you don’t find them in January.

Breanna 18:10
So I can tell you from another recent transaction, if y’all are looking for advice, um, they are house, maintain your house. Simple, what’s going to happen is if you don’t maintain your house for 40 years, and then you go to sell it, you’re gonna have $65,000 worth of termite fixes,

Fred 18:34
then you can pay $200 a year to have the guy come once a year.

Breanna 18:37
Exactly. So pay for somebody to come out, get them under the house, have them do those tubes in the ground, or whatever. and maintain that, because those are the types of things that come out in this process. Because aside, and in conjunction with these disclosures, you’re also having home inspections, usually. Obviously, in California, the real estate markets are a little crazy. So some people do a non-contingent offer. So a non-contingent offer would mean that there are contingencies built into the contract. This is what I do. So when a contract comes to me, Fred’s listed property. We’ve gotten 14 million offers, we take the best strongest offer, he sends it over to me. And we’re under contract sellers and buyers agree everything looks great. Let’s do this. Let’s hit the ground running. I go through the contract. And I parse through the information and pull out the relevant dates. So every contract that you fill out, will tell you what your close date is. So that’s 30 days, 60 days, 90 days. 21 days, we just did a 15-day close. Six hours, six hours, right? It’s California. So can you close tomorrow night? So that those dates are what I keep track of. And those dates, each date is attached to something in the agreement that has to be removed. So these are called contingencies. So we have a contingency for a loan. So you’re going to get a loan, you are going to buy a house and you need a $400,000 loan. That takes time. You can’t just go to a bank and say, Hi, I’d like $400,000 they’re like, you look super trustworthy. Here’s the briefcase full of the money.

Fred 20:40
Well, wait a second. No, no, no, you’re absolutely wrong. You’re absolutely wrong. I want you to Google. Eddie Murphy. Saturday Night Live.

Misty 20:48
I love that one. Mr. White. Yeah, that

Fred 20:52
one’s very funny. It is hysterical.

Misty 20:56
Not anymore, though.

Breanna 20:58
It would not.

Fred 21:01
You got to see it.

It’s so good. It is so good.

I mean, when it came out, I remember the night it came out. I was just screaming. Looks like this gonna be a two parter. Yeah, so show me the time keep going.

Breanna 21:18
Okay, so no, no worries. So? Well,

Fred 21:21
I think I think it’s now all this crap. You have afterward. It’s state disclosures, county disclosures, local disclosures, and kind of what should people be looking for? Do you know?

Breanna 21:34
So yeah, I would say the, as far as disclosures go, so we have the transfer disclosure statement. So that’s the TDs is the first one I talked about. Then we have the seller property questionnaire, the SB Q. That is also a super important disclosure. That’s the second disclosure I talked about. The third one was the NHD, which is the natural house. That’s the one where, really, it’s just dependent on your, you know, home insurance company and your level of comfort. And then it breaks down into disclosures from there, we have water heater disclosures, do you have a water heater? Is it strapped properly? Doesn’t work? Do you have carbon monoxide detectors do they work? Is your home built before a certain amount of time for lead? So lead paint was built before 1960? If it was built before 1960 needed earthquake disclosure, and that goes into if your house is properly strapped, if it’s got reinforcement in for an earthquake, then you have the hazards disclosure. And that is separate from the natural hazard disclosure that talks about, we give you a big booklet. And you go through it. And it talks about energy conservation and possible hazards associated with a home purchase. As far as like gases, and water and energy and those sorts of numbers.

Fred 23:12
Another thing that could scare you from buying a house.

Unknown Speaker 23:14
Exactly. Yeah. And yeah, and then you can have actual, you know, targeted disclosures. The city of San Jose, as an example, has a true disclosure. And that has to be included on every sale of any home in San Jose. So yeah, you can get down into the actual, you know, city disclosures, and then you can have a county disclosure and state disclosures and basic and basically so you know, you’re just signing not saying that you

Fred 23:49
understand and agree with it. It’s just that you receive these disclosures. That’s all it is that that’s really important that people read through as well. I don’t agree with that. Well, there’s nothing you can do about it boilerplate. I’ve never heard really, anybody, any buyer ever My problem with these kinds of things, I mean, the kinds of things that like title, the other stuff that you get in some of these disclosures, or like the title insurance might be a problem on there, that’s got to get solved. So that’s not really disclosure, that’s an actual thing. So, you know, all the inspections, whatever they can put roof inspection, home inspection, termite inspection, but he gets stuff like how far are you from an airport? How far are you from a toxic waste site, which in New Jersey is the only thing they do in addition to the sales agreement? How far are you from the toxic waste site? In other words, where are some of the bodies buried? Isn’t that pretty bad? But

Misty 24:48
that’s a really good point.

Breanna 24:50
Jersey has cleaned up. I am loving jersey. Love, love.

Misty 24:55
Like, shout out to our millions of Jersey listeners. Absolutely.

Breanna 25:00
I loved the movie garden state

Misty 25:02
There you go.

Fred 25:04
I live. I live in Philly. I went down the shore. But that’s a different entire podcast. Yeah. So the bottom line is, there’s a bunch of stuff. Ask us Don’t be scared. Most of its just bs disclosures because they have

Breanna 25:22

Misty 25:23
And we are definitely going to have Brianna on for another podcast because this was very informative

Fred 25:31
And condo docs.

Breanna 25:33
That’s great. Yeah.

Misty 25:38
Brianna, I would like to hear from you. Because I always try to plug a little commercial for Arrivva into every podcast. So what do you see with Arrivva? What is yours? What things do you like about it? Why should people pick it, that sort of thing?

Breanna 25:54
I think the way that we have structured the fees, and the way meaning that we don’t take these insane commissions. And when I first got into real estate in 2011, I was like, oh, my goodness, I you’re telling me I can make $65,000 if I sell a house like Yes, I’m and I’m my own boss, I don’t have to do anything. Except, you know, show. It’s so it’s so learning. Britta Yes. Yeah. And you’re

Misty 26:32
just like, yes. And that’s as far as most people get.

Breanna 26:36
Absolutely. And then you get into it, and then or you buy or sell your own home? And then you realize like, yes, it doesn’t take work. Absolutely. But does it take $65,000 worth of work? No. And I, as someone who brought, and I used fraud, bought my house four years ago, just having that flat fee, and being able to take what has been, you know, going to him for you do work, by all means, there’s work that goes into this. But above and beyond. Instead, I got to invest that back into my home. And I think that that is so important. And especially in California, the real estate market is insane, insane, and everybody’s pulling from everywhere there are SEOs and they’re pulling from their retirement, sometimes they’re pulling from all these crazy places just to get a piece of property here. And when you can have somebody that can acknowledge and understand, you know, their place in this purchase reo as not being you know, there to make a bunch of money but to facilitate a dream or move or whatever for you. That’s amazing. And then the other part that I love about a Riba is we are paperless. We don’t do paper we haven’t for years. And I, you know, as a millennial, hashtag millennial, I find that very important. I also like that we use slack with our clients. It is so easy. For me, I had a client yesterday, slapped me and said, Hey, I need you know, this certain piece of paper, this document associated with my transaction, and I was like, no problem, boom, there you go. There’s the document, you’ve got it. That’s unheard of a lot of people are still you know, printing out and having people sign. I mean, we do have

Fred 28:49
Title companies, mortgage companies, oh my god. The third

Breanna 28:54
The thing I would say is Fred, he is so knowledgeable, so direct, which I appreciate in a transaction like this, I don’t want somebody to shine rainbows up my bum. I want somebody to be honest.

Fred 29:09
Go shine Rainbows, you know, great, commercial.

Breanna 29:14
Honest and direct. And, you know, we had a client that was trying to go rogue on their own recently and do stuff and friend was like, please do not do this. If you do this, this will be the domino. And they didn’t want and the domino effect happened. And then they came back to Fred frustrated, like, well, what the heck man and Fred’s like I told you, but it’s okay. I’ll fix it because I’m awesome. He’s a big component of that. And just all of us, all home grown were together. We are all experts in different areas and fields. And so yeah, I just think there are great things that we’re trying to accomplish and do and I would say Those are the three ones, the flat fee, the paperless slack communication, instant communication with our clients, which is really rare. And Fred and the rest of the team.

Misty 30:11
I think that is great. And you can see why we call this podcast we fixed real estate because really, we are on our way to fixing real estate, and congratulations to everyone listening who just got some amazing information today. any parting words, Fred?

Fred 30:40
best and highest bid. That’s it and you win. Yes, yeah. And wait a second. We’ll actually have a way to do that soon. So yeah, I will. I will. I will just tease that out.

Misty 30:53
teaser. Yeah, teaser. All right. Well, stay tuned for part two coming up. In the next week with Brianna. This was so great. Thank you all so much. And please check out arrivva.com to learn more information. And you know, have you found out how much your rebate is today? Go to arrivva.com and find out thanks.

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