Real Estate Ethics
Property inspection is fundamental to successful real estate purchases. A competent inspector, completing an objective assessment, will identify apparent/potential deficiencies and save prospective buyers untold future expense and lingering unhappiness.
Competence and unbiased opinion is also a quality cornerstone in selecting a licensed real estate agent for representation. Truthful disclosure is absolutely necessary to protect all parties, including the realtor.
Realtor Mag from the National Association of Realtors offers the following-
“Dilemma 1: Should I Disclose That?
“REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.” (Article 2)
The scenario: Your seller client tells you that a home inspector recently was suspicious of insect damage when he saw the home’s damaged siding. However, the seller disputes that notion, saying he’s never had an insect problem in or around the home.
The risk: Withholding pertinent facts from buyers.
What to do: Disclose anything that affects the value or desirability of the home, says Bruce Aydt, ABR®, CRB, general counsel and senior vice president of St. Louis-based Prudential Alliance, REALTORS®. That may include insect damage, water leakage, structural problems, and more.
Otherwise, you’re putting yourself at risk of serious legal action. “I think some agents are unaware of the potential liability and might agree with the home owner and keep quiet,” Aydt says.
Practitioners may be stumped because they don’t know whether or not a particular fact is important enough to share with prospective buyers, Aydt says. If you find yourself in this situation, it’s best to err on the side of disclosure.
You’re not the expert; the home inspector is. So if a home inspector says there’s a problem, but the seller disagrees, you have to stick with the assessment of the inspector.
What if sellers refuse to disclose, and urges you to do the same? It’s the safest practice to surrender your listing, Aydt says. The legal risks to you are simply too great.“