I read a MoneySense article called The Tricks Realtors Use to Sell Homes that was so full of misinformation, it had me steaming. My prior three posts pulled it apart, but here’s another falsehood:
Legally speaking, realtors cannot be held responsible for undisclosed or unknown issues that may impact a home’s value, explains Laswell. As a result, an attitude of “don’t ask, don’t know, don’t tell” has developed within the profession.
At least the author quoted someone this time (her other assertions were completely unsupported). But this information, regardless, is once again, misleading.
Realtors are legally required to disclose all material facts.
We can’t ignore the obvious, or those things that we might have found out if only we’d asked. And if we don’t ask, or don’t disclose those material facts, we are legally responsible. The statement that we can’t be held responsible for “undisclosed” issues is incorrect; we are required to verify the information in our listings.
But if the issue is unknown, and it’s not something that we could have red-flagged, of course we’re not responsible. No one is liable for latent defects they don’t know about (hidden ones), only patent ones that are obvious.
Still, to suggest that we can get away without not asking, not knowing or not telling, is quite simply, legally, wrong. And there is no such prevailing attitude within the profession; quite the opposite. I get peppered with questions by other realtors with interested buyers every time I list a property: has there ever been water damage? Are there foundation issues? How old is the furnace? How old is the roof? Are there structural problems? What type of electrical is there? And so on.
If I get a question from a buyer’s agent that I don’t know the answer to, I pass it on to my sellers. A failure to ask (or answer) those questions accurately could see a realtor held legally responsible for negligence. A failure to verify information can also result in disciplinary action.
Take, for example, a realtor I know who was told by his sellers that a hot water tank was owned, not rented. They’d never received a bill for it. Turned out they didn’t own it after all, and he was sanctioned following a complaint to our governing body for not verifying the accuracy of the information in the listing, even though there was no practical way to do so (I’m not sure what he was supposed to do — since they’d never been billed, there was no supplier to contact.) So it’s quite the opposite of “don’t ask, don’t tell.”
In fact, the only time I have ever heard anyone recommend realtors “don’t ask”, it was a a comment made by real estate lawyer answering questions at a presentation for realtors. He said that when it came to renovation/building permits, it was better not to ask if the seller had obtianed them, because if a seller did renovations or other work without one, and there was a problem later, title insurance wouldn’t kick in to fix it. This was because the buyer had asked the question, knew no permit had been issued, and proceeded anyway, so the buyer was at his own risk.
Even then, the consensus in the lunch room later was that you were better off asking so your buyer could make an informed decision.
So, this kind of bald statement, that there is a general “attitude” among realtors to deliberately proceed with wilful, knowing blindness, is so far the opposite of what happens that it’s beyond wrong, it’s offensive. But then, so was the rest of the article. More tomorrow.