July 18, 2010

What is a Form 17?

Step 4 in Edy's series The Escrow Process for Buyers, Receiving and Reviewing the Form 17.

As a buyer, you will receive a Form 17 in most instances when you make an offer on a home.  It is also referred to as the Seller's Disclosure Statement.  It can be a small detail but it is often a helpful source of information on what the Seller knows about the condition of their home.

The document is a 5-page questionaire the Seller fills out at the time they list the house with their agent.  It goes through the home category by category and the seller must state if they have any knowledge of various conditions or occurances of their home, for example if there has ever been flooding.  They can answer if they know, (and are required by law to disclose anything they know about, as is their agent) but if they don't know, it doesn't mean it never happened before they bought the home.  Or if they never lived in the home but were investors or inherited it, they might not know, and they would mark the "don't know" or "no" box.

Two points, one is that you as the Buyer have 5 days after recieving the Form 17 to reject the purchase based on disclosures in the Form 17 and get your earnest money back, and the second is that as Buyers Agents we recommend you don't rely on the Form 17 for your in-detail information, but do a full and complete home inspection in order to thoroughly examine the home and understand any and all conditions and defects or potential trouble spots that come along with it.

A word about the home inspection and what it generally may cover:

The primary home inspection is done by a general inspector and covers all visable aspects of the home.  If it's a condo it covers only the individual unit's aspects, not the roof or the shared garage or the water or heat systems if they are shared.  But inside the condo is inspected.  On a single family residence (or a multi-family unit for investors) the systems are all checked.  Most inspectors we use include a pest inspection as part of their service.  Your inspector will test the appliances, outlets, and go up on the roof to look at the condition, look at the furnace, water heater, semi-cosmetic elements such as the windows or doors working properly, plumbing but only from a visual point of view (if you need a sewer scope, for example, that's separate) and any construction elements which are visable.  Some inspectors we know bring along an infrared scanner which helps them detect moisture where it might be in the walls or ceiling or floor.

I'll detail this further in a blog about the inspection part of the process.

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