The Blog

The Agent’s Visual Inspection Disclosure (AVID) is an often misunderstood form, according to an Escondido Transaction Coordinator. Because of this, the Escondido Transaction Coordinator at Transaction 911 went out and conducted a little bit of research.

Here’s some advice from CRES Insurance Services with respect to two major concerns about the AVID form.

Concern: Some REO Sellers and their Listing Agents seem to adopt a pretty stern approach to the sale calling the shots, and telling everyone how the world works. This is reality. This is also dangerous.

Advice: Here are some pitfalls to avoid: “My Seller is not required to supply a Transfer Disclosure Statement and so as the Agent (since that is exempt), I do not have to complete the Agent’s Visual Inspection portion of the TDS and therefore, I do not have to provide a written visual inspection.”

This is wrong! Every Listing Agent and Selling Agent of residential properties (1-4 units) is required to perform a reasonably competent and diligent visual inspection of accessible areas of the property offered for sale and to disclose in writing their findings of material items. Just because the REO Seller is TDS exempt does not change the disclosure law for either Agent.

Solution:

Usage of the Agent’s Visual Inspection form or similar documentation can satisfy this requirement. Also, describe what you see but never provide the cause. Real Estate Licensees are not Engineers or General Contractors; they have no place stating something like “normal settling” or normal cracking” Say what you see but never why it is there.

Avoid the temptation to use a silver bullet phrase such as “Agent recommends that Buyer obtain Physical Inspection. That does nothing to show that you preformed your own visual inspection and is included in numerous other documents such as the Buyer’s Inspection Advisory.

Additionally, the disclosure should be specific to the Property. It is not a continuation of the advertising talking about lovely views, hand crafted finish and so forth. It should point out negative aspects such as stains in carpet, stains on ceilings, chipped paint, a warped door or sticking door, torn or missing screens, chipped tile, scratches in hardwood flooring and similar issues.   (Source: CRES Insurance Services)

No matter what, you (as either the listing agent or the selling agent) needs to perform a visual inspection of the property. Unless you are a plumber or some other sort of licensed professional, you should not be commenting on whether something is “broken,” “leaking,” “moldy,” or anything else of that nature. You need to state what you see with your own two eyes–scratches on walls, debris on floor, brown spot on ceiling, for example.

The California Association of Realtors has spent countless dollars working with attorneys to create forms in order to protect agents, buyers, and sellers. When used correctly, the AVID form can protect agents from a world of trouble down the road.