BIC TIP #1155: Relying on the Listing Agent’s Disclosures
Material facts are still the tough MFs that come back to bite brokers, and Stephen Long wants to keep them front and center. This tip covers both sides of the deal. Listing agents must discover and disclose material facts. And buyer’s agents? You can reasonably rely on the listing agent and seller, but you are not off the hook for your own due diligence.
What Makes a Fact Material
Material facts are things that relate to or are about the property that would affect a buyer’s decision about whether to purchase. If a reasonable buyer would want to know it before making that decision, treat it as material.
Stephen lists several examples, including but not limited to septic permits, high radon levels, structural issues, and unpermitted space. These are the kinds of things that change how a buyer views a home.
Listing Agents: Discover and Disclose
As a listing agent, your job is not just to share what the seller volunteers. You should discover material facts and disclose them, among other duties. That means asking questions, reviewing permits, and paying attention to what you see in the property.
A listing that leaves out a known material fact is a problem waiting to happen.
Buyer’s Agents: Trust, but Verify
On the buy side, you can reasonably rely on the representations of the listing agent or the seller. You do not have to assume everyone is hiding something.
But that reliance has limits. Stephen is clear that you are not off the hook to do your own due diligence and make sure nothing was missed. If something looks off, or a reasonable broker would have noticed it, you need to follow up. Your buyer is counting on you to look out for them, not just pass along what the other side said.
The Practical Takeaway
Material facts are anything that would affect a buyer’s decision, from septic permits to radon to structural issues and unpermitted space. Listing agents must discover and disclose them. Buyer’s agents may reasonably rely on the listing side, but must still do their own due diligence. On either side, the goal is the same: give the buyer what they need to make an informed decision.
