How to Read (San Francisco) Real Estate Disclosures Like a Pro: 11 Insider Tips for Buyers

Introduction: Why Real Estate Disclosures Matter More Than You Think

If you're diving into San Francisco's real estate market—whether you're buying your first condo, adding to your investment portfolio, or upgrading to a multi-unit property—you're about to receive a hefty disclosure packet. Hundreds of pages. Dozens of documents. Legal jargon everywhere.

Sound familiar?

Don’t worry. As longtime San Francisco agents at Legacy Real Estate, we—Jennifer Burden and Carren Shagley—are here to help demystify the process.

Disclosures are your window into a property's past, present, and potential future issues. They're also your best protection from unexpected surprises. Our goal with this guide is to help every type of buyer—from the cautious first-timer to the savvy investor—understand what disclosures mean, what to prioritize, and when to ask more questions.

Who We Are: Jennifer Burden & Carren Shagley of Legacy Real Estate

We’ve spent decades guiding clients through San Francisco’s complex and competitive housing market. From quaint Victorians in Noe Valley to income-generating triplexes in the Mission, we’ve seen it all, and we’ve read thousands of disclosure packets along the way.

At Legacy Real Estate, we don't call ourselves agents; we call ourselves advisors, advocates, and teachers. Our business is keeping you confident, clear, and informed at every turn.

What is a Disclosure Package?

A real estate disclosure is a series of statutorily mandated documents prepared by sellers to advise purchasers about a property's condition. It's a thorough description of the house, its systems, repairs, characteristics, and history, prepared by the seller and listing agent.

A typical San Francisco disclosure packet includes:

• The San Francisco Seller Disclosure

• Transfer Disclosure Statement (TDS)

• Property and pest inspection

• The 3R Report

• Water & energy compliance certificates

• Environmental hazard details

• Underground Storage Tank (UST) reports (if any)

Why These Papers Are Significant for Every Purchaser

First-time purchasers: You might not know what's typical, or what's a red flag. Disclosures can help you steer clear of expensive surprises.

Seasoned investors: You already know out-of-sight expenses kill ROI. Disclosures can reveal deferred maintenance problems, non-permitted work, or issues with the tenants.

Condo & multi-unit purchasers: Disclosures detail HOA regulations, common systems, leaseholder rights, and more.

The San Francisco Seller Disclosure: The Inside Scoop

This city-specific sheet is a goldmine for consumers. It details:

1. Property History
   Renovations, repairs, damage, or unique conditions.

2. Environmental Issues
   Is the home near a fault line? Has there been water intrusion?

3. Tenant Information
   particularly for multi-unit purchasers: Are there protected tenants? Ellis Act history? These can significantly effect your investment.

✅ Each box checked “yes” should be followed with an explanation in the addendum. Sparse answers? That’s a red flag.

Transfer Disclosure Statement (TDS)

This statewide form obligates sellers to disclose material facts. Details matter even small ones—a non-working doorbell or antiquated electrical. Compare it side-by-side with the inspection reports for consistency.

3R Report: What Permits Tell You

The 3R (Report of Residential Building Record) is your insight into city-approved renovations.

Status meanings:

• C (Completed): Inspected and approved.

• I (Issued): Work started but not finalized.

• X (Expired): Permit issued, work likely unfinished or unapproved.

For investors, unfinished permits = red tape. Always double-check with the San Francisco Department of Building Inspection (SFDBI).

Underground Storage Tank (UST) Reports: An Investor Must-Read

If you're buying an older property, especially one used commercially, check for this.

A UST can lead to:

• Soil contamination

• Costly removal ($100K–$300K+)

• Delays in resale or development

If no UST report is provided, check GeoTracker and recommend further inspection.

Water & Energy Compliance Certificates

Since 1982, sellers must show compliance with San Francisco’s water and energy-saving rules. Certificates prove that fixtures are low-flow and insulation meets standards.

You don’t need one if:

• The building permit was issued after July 1, 1978

• The property already has recorded compliance

Hidden Red Flags in Disclosures

Not everything is as it seems. Look for:

• “Unknown” or blank responses

• Reports that contradict each other

• Mold or water damage with no remediation records

• Unpermitted additions

• Long gaps between inspections

These may not be dealbreakers, but they do warrant further investigation.

Smart Questions Every Buyer Should Ask

Whether you're new or experienced, ask:

• What repairs were professionally done vs. DIY?

• Are tenants under rent control?

• Are there shared walls, plumbing, or electric systems?

• Is there earthquake retrofitting?

• What’s the history of pest treatments?

How to Review a Disclosure Package Without Losing Your Mind

1. Start with the summary sheets.

2. Check the TDS and Seller Disclosure for big-ticket issues.

3. Review inspections for patterns (e.g., repeated drainage issues).

4. Review HOA docs carefully (for condos).

5. Upload the documents into your AI tool and ask for a summary of red flags (be sure to verify the AI findings with the actual documents).

6. Ask us (a professional) for a summary review, we’ve got a system.

Legacy Real Estate’s Disclosure Review Process

We provide:

• Line-by-line guidance through key documents

• Cross-checks with inspection findings

• Trusted referrals for second opinions

• Timeline management so you’re never rushed

Whether you're buying a 1-bedroom starter condo or a 4-unit investment property, we tailor the process to your goals.

FAQs: How to Read San Francisco Real Estate Disclosures

1. Do I need to read every page?
No, but you need to know which pages matter. We’ll help you prioritize.

2. Can I walk away after reviewing disclosures?
Yes. If something doesn’t sit right, disclosures give you an exit path before contingencies are removed.

3. Do disclosures impact price negotiations?
Absolutely. We often use inspection findings to adjust offers or request credits.

4. Are disclosures ever inaccurate?
Unfortunately, yes. That’s why we cross-reference them and recommend third-party inspections.

5. Do tenants need to be disclosed in multi-units?
Yes, and tenant protections in SF are strict. This is crucial for investor buyers.

6. Can disclosures help in resale later?
They sure can. Full documentation helps protect you as a future seller too.