Thanks for joining us for part 3 of our five-part blog series about setting up expectations during the home buying process. This series is covers:

  1. Introduction (August blog posted; see here: link)
  2. Escrow Process (September blog posted; see here: link)
  3. Disclosures & Investigation Responsibilities (This blog post)
  4. Financing Process (November blog post coming)
  5. Pre-Closing & Final Steps (December blog post coming)

Parts 2-5 of this series are split into two parts—one tailored for buyers, like this post, and one for sellers—because the concerns and responsibilities can differ greatly depending on your role in the transaction. Now, onto Disclosures and Investigation Responsibilities!

As a buyer, one of your most important responsibilities during the purchase process is to thoroughly investigate the property. Many buyers assume “investigations” means only the physical home inspection, but it actually covers much more.

1. Physical Inspections

This is your opportunity to verify information disclosed by the seller, agents, or third parties. Protect yourself by hiring qualified professionals. A comprehensive general home inspection is essential, and depending on findings, you may also need specialists—such as a chimney, sewer, roofing, electrical, termite, or structural inspector. Your agent can help you determine which inspections make sense for your property; and which professionals to use.

Inspection vs. Appraisal: These two terms are often confused but serve entirely different purposes.

  • An inspection is ordered by the buyer to assess the property’s condition.
  • An appraisal is ordered by the lender to obtain the appraiser’s opinion of market value for loan security.

While you may pay for both, the appraisal protects the lender, ensuring the property’s value supports the loan amount.

2. Review Seller Disclosures

Sellers must disclose all known material conditions or defects that could affect value or desirability. But as President Ronald Reagan once said, “Trust, but verify.” Even honest sellers may overlook something or underestimate its importance. Review disclosures carefully, then investigate anything that matters to you. Your agent can guide you in prioritizing next steps.

3. Review Third-Party Reports

Several key reports issued by third parties should be provided to buyers, such as:

  • Preliminary Title Report: Lists recorded claims, liens, easements, or unpaid taxes.
  • Natural Hazard Report: Details risks like fire zones, fault lines, radon, or flood areas—each can affect cost, safety, and insurability.
  • Local Building Reports: Some cities require pre-closing reports to confirm proper permitting of improvements and additional information, if required. These reports vary by jurisdiction but are a valuable way to confirm that major work (like additions, decks, or electrical updates) were inspected by the local, usually city, inspector. While your inspectors can often identify whether visible improvements appear consistent with permitted work, documentation from a city is key for peace of mind.

4. Conduct Independent Research

Some important details require your own investigation:

  • Home Insurance: California’s insurance market is volatile. Contact a few insurers early in escrow to confirm the property is insurable and affordable.
  • Megan’s Law Database: Check California’s registry if proximity to registered offenders could impact your comfort level.
  • Schools: Even if you don’t have school-age children, local school ratings can affect future resale value.
  • Zoning & Development: Research any planned developments or zoning changes nearby that might affect your long-term enjoyment or value.

5. Homeowner Association (HOA) Review

If you’re purchasing a property governed by an Home Owners Association (“HOA”), you’ll receive an additional packet of disclosures from the association—usually through escrow. Review these carefully, especially regarding SB 326, California’s new “wood balcony law.” It applies to complexes with three or more units that have “elevated elements” (balconies, decks, or walkways made of wood six feet or more above ground). These safety inspections and disclosures are mandatory and may impact future repair assessments.

Timing and Contingencies

Most buyers have 17 days (more or less, can be negotiated) to complete investigations and remove their Investigation Contingencies. These contingencies do not expire automatically—they must be formally removed in writing once you’re satisfied with your findings.

If you fail to remove the contingency by the deadline, you may receive a Notice to Perform from the seller. Continued delay could allow the seller to cancel the contract. Once you remove the contingency, your earnest money deposit (usually 3% of the purchase price) becomes nonrefundable if you later back out due to a condition you could have investigated.

✅ Buyer Tips:

  • Review reports that have been provided. Courts will assume that you had knowledge of items included in the various disclosures and reports that were provided to you during this period.
  • This is the time to do independent research. Make sure you look into anything that may impact your enjoyment of your new home. Neighborhood safety or noise, school boundaries, etc.

Leverage the strength of Vista Sotheby’s. Experience the dedicated attention of Team Plunkett. Buy with confidence.

Note: Some items may be specific to our local area. Always check with your agent for local and state-specific requirements.