subject: Why You Need Disclosure Documents For Your Private Lenders [print this page] Disclosure statements are important documents to give your private lender.
This is not to be confused with a property disclose, but a disclosure with the private lender. What I have to do in Ohio and what many of you have to do is give a disclosure statement.
You may have heard of a SCOR statement, it stands for small company offering. In some states, you cant use a SCOR statement and a disclosure statement.
Make sure you have the right disclosure statement document and that you get it to your private lender. You need to have a meeting of the minds. Also, you need to have something in writing. With these big deals, get it in writing.
Youre probably asking yourself, where can I get a disclosure statement drawn up? Well, you get an attorney to draw it up for you, but not a real estate attorney. You will need an SEC attorney for this document.
Variables such as changing mortgage rates and the fact that the market can change need to be included.
This will rarely effect any transactions, but disclosure statements cover you bases. They fully inform your lender and they keep you in compliance with the SEC regulations out there. As hard as it is to do these documents, you have to be in compliance.
Make this document readily available. Some states have strict regulations on the availability of these documents. In a state like Michigan, you are required to give your private lender this statement 48 hours in advance.
Also, we have the lender sign off on the disclosure statement, this way we have proof that they have received the document.
