Sellers Advisory Guide Continued

Wells
If domestic water for the property is supplied by a private well, the seller is required by state law to test the well for total coliform bacteria and nitrates. Sellers may also want to have the well tested for contaminants other than bacteria and nitrates. Proper procedures need to be used when testing domestic wells. More information on this state law
requirement can be found at http://www.dhs.state.or.us/publichealth/dwp/dwtfaq.cfm. Oregon also requires that all private wells not already registered with the state be
registered at the time the property is transferred. Real estate forms in use in Oregon often delegate to the buyer the responsibility for registering the well. For information on the state well registration program, visit: http://egov.oregon.gov/OWRD/GW/well_id.shtml .

Well Flow Tests
If domestic water is supplied by a private well, the seller will want to make certain the well provides adequate water for domestic needs. It is strongly recommended that a well
flow test be conducted prior to marketing of any property that depends on a well for domestic water. Careful attention should be paid to disclosures or representations about
wells. The seller should not allow the buyer to rely on a test done for the seller. The buyer should be advised to contract and pay for their own well flow test.

Sellers should review any well records they may have as buyers will usually ask to see such records. Interested sellers can obtain more information about well logs at:
http://apps2.wrd.state.or.us/apps/gw/well_log/Default.aspx . While real estate licensees are not trained and do not have the expertise to test wells, they should be able to direct the seller to the appropriate well professionals. Disclosures and disclaimers regarding domestic wells are common in real estate transactions and should be reviewed with the seller’s agent as part of contract negotiations.

Underground Oil Storage Tanks
Sellers should be aware of potential problems associated with underground oil storage tanks. Such tanks can cause serious problems if they have leaked oil. Underground oil
tank leaks can create serious potential liability for sellers even if they do not know of the leak. Oil storage tanks, including home heating oil tanks, are closely regulated in
Oregon. An explanation of Oregon laws concerning home heating oil tanks can be found at: http://www.deq.state.or.us/lq/tanks/index.htm

A seller who knows or suspects that property has an underground storage tank should take appropriate steps to protect his own interests, including seeking information from the Department of Environmental Quality (DEQ) and, if necessary, consulting with an environmental hazards specialist or attorney. SELLERS ARE ADVISED TO HIRE
APPROPRIATELY TRAINED ENVIRONMENTAL PROFESSIONALS TO INSPECT THE PROPERTY IF AN UNDERGROUD OIL STORAGE TANK IS FOUND OR SUSPECTED.

Oil storage tank inspection, decommissioning and cleanup requires a special license from DEQ. A list of licensed providers can be found at http://www.deq.state.or.us/lq/tanks/index.htm Inspection, decommissioning and cleanup of oil tanks can take time. Sellers who are aware of the existence of a tank should, therefore, begin the process early to avoid transaction delays. Real estate licensees are not trained or licensed to provide advice or services regarding  underground oil storage tanks, but can assist the seller in finding the proper professionals.

Environmental Hazards
Environmental hazards include everything from expansive soils to landslides to forest fires, tsunamis, floods and earthquakes. Environmental hazards can also include indoor
air quality (e.g., radon or carbon monoxide) and hazardous materials, like asbestos. Environmental hazards known to the seller must be disclosed to all buyers. Sellers in
doubt about such hazards should check with the county in which the property is located. Oregon counties can be located at: http://www.aocweb.org/Cnty-links-frm.htm .
Wildfire is a concern in some areas of Oregon. Information about the risk of wildfire is available from the Oregon Department of Forestry at:
http://www.oregon.gov/ODF/FIRE/fire.shtml Some homeowners are subject to special rules under the State’s “Forestland-Urban Interface Classification.” Owners of property
within the classification should complete a “Property Evaluation and Self-Certification” to avoid potential future liability. Forestland-Urban Interface status must be disclosed on
the Seller’s Property Disclosure form. Information about the Forestland-Urban Interface and on the evaluation and certification program is available at:
http://www.oregon.gov/ODF/FIRE/SB360/sb360.shtml. Real estate licensees do not have the expertise to advise homeowners on fire protection requirements but can often
direct owners to the appropriate professionals.If flood status is an issue because of insurance restrictions, claims or past history, the seller should bring the matter to the attention of their agent and be prepared to make the appropriate disclosure to buyers. Flood plain maps and information are available at: http://www.fema.gov/business/nfip/sfhdform.shtm. Real estate licensees do not have the expertise to assess flood potential but can often direct sellers to the appropriate local authorities.

If environmental issues have been a problem in the area, or the seller has any notice of potential problem with air quality, ground or water contamination or other problems with the area or property, the seller should bring the matter to the attention of their agent and carefully consider disclosure obligations to potential buyers. If in doubt about potential hazards, the seller should visit the Environmental Protection Agency (EPA) website at: www.epa.gov/iaq/iaqinfo.html.

Information about specific contaminated sites that have been reported to the government can be found at: http://www.epa.gov/superfund/sites/ and, for sites specific to Oregon: http://www.dhs.state.or.us/publichealth/superfund/sites.cfm. Real estate licensees are not trained and do not have the expertise to discover and evaluate environmental hazards. Sellers, therefore, are advised to hire appropriately trained environmental professionals to inspect the property and its systems or fixtures for environmental hazards if there is any question regarding environmental hazards.

Wood Stoves
The Oregon Department of Environmental Quality (DEQ) has developed a statewide wood stove program to promote the use of cleaner-burning wood stoves and to help
homeowners with wood stoves burn wood more efficiently and with less pollution.  Under Oregon law, no person may sell, offer to sell or advertise to sell a used, non-certified
wood stove. Non-certified wood stoves (including fireplace inserts) are older models (mostly pre-1985) that have not been certified by the DEQ or the federal Environmental
Protection Agency to meet cleaner-burning smoke emission standards.

Individual communities in Oregon may have additional rules governing the sale of or use of wood stoves and fireplaces. The seller should ask their agent for assistance or check
with appropriate local government agencies. County websites can be found by visiting: http://www.aocweb.org/aoc/AboutOregonCounties/CountyLinks/tabid/72/Default.aspx .
and cities at:http://www.orcities.org/CityResources/CityInformation/tabid/846/Default.aspx.  General information about wood stove regulation in Oregon is available at: http://www.deq.state.or.us/aq/burning/woodstoves/101.htm Inspection of fireplaces and wood stoves requires special training and expertise. Although
a real estate licensee may be able to help you find a local wood stove professional, they cannot themselves inspect or evaluate a wood stove.

Mold
Molds are one of a variety of biological contaminants which can be present in human structures, including in residential housing. Mildew is perhaps the most common and
best known of the molds. Less well known, and far less common, are certain molds identified as possible contributors to illness, particularly in people with allergies. Serious
mold problems usually involve property with defective siding, poor construction, water penetration problems, improper ventilation or leaking plumbing.

In a few cases, these problems have led to the growth of molds which caused medical conditions in some people. Sellers who have any knowledge or notice of molds in their property should arrange for inspection by a qualified professional. Information on moisture intrusion and mold problems associated with human structures can be found at:
http://www.epa.gov/iaq/molds/moldresources.html. Inspection, discovery and evaluation  of specific water intrusion or mold problems requires extremely specialized training and  is well beyond the scope of a real estate licensee’s expertise. Sellers are, therefore, advised  to hire appropriately trained professionals to inspect the property if the seller is concerned  about the possibility of harmful molds. Any mold condition, whether believed harmful or not, should be disclosed to your agent and any potential buyer.

Smoke Alarms
In Oregon, no person may sell a dwelling unless there is installed in the dwelling unit an approved smoke detector or smoke alarm installed in accordance with the rules of the
State Fire Marshall. Because of this state law requirement, most residential real estate sale forms contain a representation by the seller that, at the earlier of possession or
closing date, the dwelling will have an operating smoke detector as required by law. Sellers should anticipate the smoke alarm requirement and make sure their property is
properly equipped prior to marketing the property.

Battery operated ionization smoke alarms sold or used in Oregon must have a 10-year battery and a “hush” mechanism which allows a person to temporarily disengage the
alarm. All dwellings must have the proper type, number and placement of alarms as required by the building codes at the time the dwelling was constructed but not less than
one alarm adjacent to each sleeping area and at least one alarm on each level of the dwelling. (Additional rules apply to rented property.) Information about smoke alarm
and detector requirements in Oregon can found on the State Fire Marshall’s web site at: http://www.sfm.state.or.us/Comm_Ed/FireSafety/Smoke%20Alarm/smoke.htm .
Real estate licensees are not trained in building code or fire code compliance. If there is any doubt about whether a smoke alarm or detector system complies with building and
fire code requirements, a licensed home inspector, or the home alarm or detector company, should be contacted. Your real estate agent may be able to assist you in finding the right code compliance professional.

Deaths, Crimes and External Conditions
In Oregon, certain conditions on or near real property that may be of concern to buyers are considered not to be “material” by state law. Ordinarily, “material facts” must be
disclosed by the seller or the seller’s agent. However, because state law declares certain facts to be not material, sellers are not held responsible for disclosing them as might
otherwise be the case.

Facts that would be subject to disclosure but for the statute include the fact that the property was the site of a death, crime, political activity, religious activity, or any other
act or occurrence that does not adversely affect the physical condition of, or title to, real property, including that a convicted sex offender resides in the area. Although the seller is not required to disclose such facts, they may elect to- for instance disclosing a pedophile living next door to buyers with small children. Under Oregon law, neither the
seller nor their agent is allowed to disclose that an owner or occupant of the real property has or had human immunodeficiency virus or acquired immune deficiency syndrome.

Neighborhoods
Neighborhoods change over time. Some of these changes can affect the value or desirability of property. Building permits, zoning applications and other planning actions
are a matter of public record and notice. Any notice of planning actions in the area, or even knowledge of future plans by neighbors or the government, that the seller has
should be discussed with their real estate agent to determine what, if any, disclosure should be made to buyers.

Information about planning departments can be found on the county or city website: http://www.aocweb.org/Cnty-links-frm.htm city information is available at:
http://www.orcities.org/CityResources/CityInformation/tabid/846/Default.aspx.  State road building projects information is available from the Oregon Department of
Transportation at: http://www.oregon.gov/ODOT/HighwayRegions.shtml.

Location within a school district can be an important attribute of a neighborhood. School boundaries, however, are subject to change. If location within a particular school district is going to be advertised to attract buyers or justify the asking price, the seller should investigate the boundaries and the likelihood of change by contacting the school district directly. Oregon law provides a “just compensation” right for some Oregon property owners if a public entity enacts or enforces a land use regulation that has the effect of reducing the value of the property. Sellers who believe the value of their property is affected by Oregon’s property compensation laws are advised to seek the counsel of
appraisers, attorneys or other land use professionals.

DOCUMENT INSPECTION AND INVESTIGATION
Information Generally
Information from third parties regarding real estate and a real property transaction is not usually verified by real estate licensees. It is the responsibility of the seller to read the
documents the seller is depending on in answering questions about the property. Interpretation of many documents involved in a real property transaction requires the
practice of law and is beyond the scope of a real estate licensee’s expertise. SELLERS UNCERTAIN ABOUT THE LEGAL EFFECT OF TRANSACTION DOCUMENTS SHOULD CONSULT AN ATTORNEY.

Real Estate Sale Form (Sale Agreement)
A contract for the sale of real property must be in writing to be enforceable in Oregon. A VERBAL OFFER OR ACCEPTANCE SHOULD NOT BE MADE OR RELIED UPON. Contracts for the sale of property are often called “earnest money” or “sale agreements.” They are legally binding contracts. Sellers should seek competent legal advice before signing any contract they do not fully understand.

Sale agreements usually include provisions concerning who will hold the earnest money and under what conditions it may be refunded to the buyer or forfeited to the seller.
Sellers should carefully review these provisions in any proposed transaction. The amount of earnest money pledged and the conditions under which it may be refunded or forfeited are important matters that should be carefully negotiated between the buyer and the seller.

Most sale agreements are written using a standard form. In Oregon, most licensees use a form developed specifically for Oregon real property transactions. Many of these forms contain dispute resolution provisions that require mediation or arbitration of disputes. Arbitration and mediation clauses can affect legal rights, including the right to a judicial determination of a claim and the right to appeal.

Sellers are responsible for selecting the terms and conditions of their agreement. Real estate licensees can give sellers important marketing, business and negotiating advice.
Real estate licensees can assist in preparation of the sale documents only pursuant to the client’s instructions. Real estate licensees are not attorneys and are prohibited by law
from giving legal advice. To obtain a referral for a real estate attorney, visit the Oregon State Bar at http://www.osbar.org/public/legalhelp.html or contact them by phone at
503-684-3763 (Portland metro) or 800-452-7636 (greater Oregon).

Financing
The buyer’s ability to finance the property is an important contingency in most residential transactions. Buyers must act in good faith and use best efforts to obtain a loan if the sale is contingent upon obtaining a loan. Buyers often seek pre-approval from a lender prior to writing an offer. Seller’s often demand such letters as part of the transaction process. Sellers should discuss the use of pre-approval letters, including such common forms as the Oregon Residential Loan Application Status Report, with their agent. A copy of the Oregon Residential Loan Application Status Report form can be found at: http://www.oregonrealtors.org.

A pre-approval letter should state that the lender has reviewed the buyer’s credit report, income requirement and cash to close. The lender then pre-approves the buyer for the
loan, subject to an acceptable appraisal of the property. The appraiser will normally work for the lender, not the seller. Appraiser certification and licensure can be checked at:
http://www.oregonaclb.org/index.php?option=com_content&task=view&id=20&Itemid =112.

Once the appraisal has been received, the loan underwriter authorizes final loan approval. Most residential sale agreement forms contain a provision that allows the buyer to cancel the transaction if the property appraises for less than the purchase price. Only when the appraisal and underwriting process is completed will an actual loan be secured.

The entire financing process normally takes approximately 30-45 days. If the seller anticipates a “short sale” where the asking or accepted price is insufficient to cover the
seller’s total indebtedness, the time necessary to arrange financing may be greatly increased. If the seller is asked to finance any part of the transaction, the buyer’s financial
status will become material to the transaction. A real estate licensee cannot hide material information from any party to a real estate transaction and should not be asked to do so by the seller or buyer.

Title Report and Commitment
Most real estate transactions are contingent on the buyer’s approval of the preliminary title report and any conditions, covenants and restrictions (CC&Rs) attached to the
property. The seller will be required to obtain, and pay for, a report and provide it to the buyer. The report, produced by a title insurance company, contains important information that should be reviewed by the seller, if possible, prior to marketing.

In particular, a title report will list certain “exceptions” to the policy the title company will issue for the property. Exceptions can make the seller’s title undesirable or even
unmarketable. Title exceptions should, therefore, be carefully reviewed. General information about title issues can be found at: http://www.titlelawannotated.com .
Questions about the title report and associated documents can be directed to the title or escrow officer issuing the report or to the seller’s attorney. Review of title reports for
legal deficiencies involves the practice of law and is beyond the expertise of a  real estate licensee.

Homeowners’ Association Documents, Covenants, Conditions and Restrictions
Covenants, conditions and restrictions, called “CC&Rs,” are formally recorded private limitations on the right to use real property. Often, but not always, CC&Rs are enforced
by a homeowners’ association. Review of the CC&Rs is typically part of a real estate sale. Although real estate licensees are familiar with common CC&R provisions,
determining the legal effect of specific provisions is considered the practice of law in Oregon and, therefore, beyond the expertise of a real estate licensee.

Homeowners’ association rules and regulations can significantly impact a buyer’s plans for the property and, therefore, affect price or desirability. Planned communities and
condominiums are very likely to have detailed homeowners’ association governing documents, mandatory fees and ongoing homeowner obligations. Governing documents,
fees and homeowner obligations should be reviewed by the seller prior to marketing so that any potential issues may be identified. For more information on homeowners’
associations and CC&Rs, visit http://www.realtor.com/BASICS/condos/ccr.asp .

Homeowners’ Insurance
The insurance claims history for a home may affect the cost of homeowners’ insurance, or even its insurability. Most insurance companies use a database service called the
Comprehensive Loss Underwriting Exchange (CLUE) to track claims made. Depending on the content of the CLUE report, and the insurance company’s policy, home insurance
may prove more difficult to get than expected.

Sellers who have made claims on their homeowner’s insurance (especially for flooding or water intrusion) may want to check their CLUE Report prior to marketing the property to make certain buyers will not have difficulty obtaining insurance. Homeowners can obtain a copy of the report for their property online at: http://www.choicetrust.com. More information  on homeowners insurance in Oregon can be found at: http://www.insuranceoregon.org/.