TDS and SPQ: The Two Most Important Documents in Buying or Selling a Home

When buying and selling a house in the Bay Area, TDS (Transfer Disclosure Statement) and SPQ (Seller Property Questionnaire) are two important disclosure documents that help buyers understand the true condition of the house and ensure the transparency of the purchase transaction. Knowing what role they play can better help everyone in the buying and selling process~ TDS (Transfer Disclosure Statement)

TDS (Transfer Disclosure Statement) is a mandatory legal document in California, also known as the "Transfer Disclosure Statement", which is filled out by the seller to fully disclose the current status of the house to potential buyers. Regardless of whether the property is a residential, condominium or other type, as long as it is a residential real estate transaction in California, the seller must provide TDS.

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  • Condition of the Home's Structure and Equipment : The TDS includes a full disclosure of the home's physical structure, such as the roof, walls, electrical system, plumbing, windows, doors, etc. The seller must clearly list the existing condition of the property and indicate any known damage or repairs.

  • Seller’s Knowledge : TDS only requires sellers to disclose what they know. In other words, sellers are not required to conduct additional inspections or investigations into potential problems with the property, but they are obliged to disclose existing or known conditions truthfully.

  • Environmental Hazards : The seller must disclose any known environmental hazards, such as earthquake faults, flood zones, lead paint, asbestos, etc., in the TDS.

  • Legal issues : TDS will also look at legal issues with the property, such as whether there are any outstanding legal disputes or whether the property complies with local building codes. The purpose of TDS is to increase transaction transparency and ensure that the buyer has a comprehensive understanding of the condition of the house before the transaction.

    
    

    If the seller does not disclose the information truthfully or fully, he or she may be held legally liable for non-disclosure after the transaction is completed. Therefore, the seller must fill in the form carefully to avoid future disputes.
    

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SPQ (Seller Property Questionnaire)

SPQ (Seller Property Questionnaire ) is a more detailed supplementary document that further requires the seller to disclose information about the house. Although TDS already covers the main issues of the property, SPQ is designed to obtain more detailed knowledge of the seller, especially those issues that may not be detailed in TDS.

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• The home's use and repair history : The SPQ covers various repairs, modifications, or upgrades to the home's history, such as electrical repairs, plumbing issues, home expansions, etc. It asks the seller to explain the specific repair and replacement history of the home, rather than the TDS.

• Neighborhood environment : The seller needs to disclose possible impacts on the environment surrounding the house, such as neighbor disputes, noise, traffic and other issues.

• Utilities and Use : The SPQ includes questions about water, electricity, gas, and sewer systems, ensuring the buyer has a clear understanding of these critical utilities.

• Insurance claims and damages : The seller needs to disclose whether there have been any insurance claims on the home in the past, such as losses caused by natural disasters such as fire and flood, as well as subsequent repairs.

The SPQ provides more detailed disclosure than the TDS, thus ensuring full transparency about the condition of the home and reducing buyer concerns about the home’s history or neighborhood issues.

Through SPQ, sellers can reduce the risk of future claims from buyers who discover undisclosed issues, because SPQ provides a more comprehensive Q&A format that leaves sellers with no room for rebuttal.

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Conclusion

• TDS focuses more on the current condition of the property : it covers the overall condition of the home, especially regarding physical and legal issues. TDS emphasizes the seller's knowledge of the current condition of the home, but does not require the seller to take the initiative to conduct more investigations.

• SPQ focuses more on the history and details of the house : It supplements what the TDS may miss, including past problems with the house, the neighborhood, and everything the seller knows about the house. SPQ involves more specific questions and is designed to obtain all the seller's knowledge of the property.

  
  

TDS is a legally required document in California and is required for all residential transactions. SPQ is a questionnaire used to increase transparency and refine disclosure, and sometimes appears as a supplementary document. Both protect buyers and sellers and minimize possible disputes in the future.