12 Apr What Realtors Can and Cannot Share During a Transaction
What a Realtor can and cannot share is based on who we represent. A Realtor’s obligation is protecting their client and getting them the best deal. Typically, the question of disclosure is more important when acting as a seller’s agent. Realtors are legally and morally obligated to tell a buyer anything that affects their life in a home. The listing agent follows the same disclosure laws as the seller. The seller’s disclosure contract says, “Under Minnesota law, sellers of residential property … are obligated to disclose to prospective buyers all material facts of which seller is aware that could adversely and significantly affect an ordinary buyer’s use or enjoyment of the property or any intended use of the property of which the seller is aware.” More simply put, Realtors need to share information about the house, not their clients.
Realtors Need To Share
We must disclose things that directly impact the property for sale. This includes property damage and anything the seller knows about the house that could negatively impact living conditions. This could be things such as flicking lights, windows that don’t lock properly, any appliances that are not in working order, or higher than allowed radon levels. Additional things to disclose include shoreland restrictions, historical restrictions, or easements. A far rarer but interesting circumstance is notice of “unnatural death” or homicide on the property.
Realtors Do Not Need To Share
It may surprise you but a Realtor does not have to disclose city plans like building a new highway behind a property. If you think about it, a lot of homes on busy roads didn’t start out that way. Required disclosure information is things that happen on the property or affect the taxes of the home. A Realtor does not need to disclose group homes down the street, planes flying overhead, or renters next door. This affects the buyer more than the seller and is why a good Realtor is so beneficial.
A good Real Estate agent is knowledgeable about the local market, zoning divisions, and current city news. That’s not to say we’ll have all of the answers, but we’ll know more than the average person. This comes into play often with new construction. You may buy a beautiful new home backing to a charming cornfield only to be pressed against the back of a Target in two years. A knowledgeable Realtor can inform you if the city has zoned the land around home for commercial use. There’s nothing wrong with buying a home near commercially zoned areas. However, it is nice to actually make that decision instead of the surprise of it happening.
Realtors Should NOT Share
This is not a legal requirement but a good business practice requirement. An effective Realtor will not reveal anything that negatively affects their client’s standing in a negotiation. This includes the seller’s motivations for moving. There can be strong emotional reasons to move like getting divorced or leaving a house full of memories of a lost loved one. These emotional motivations clue the buyer into the eagerness of a seller. Anything that gives away the desire for immediacy will give the other side a bargaining chip. This matters for both the buyers and the seller’s side. If a seller knows a buyer is a very well-paid doctor or recently received a large inheritance they might hold out on fiscal negotiations.
To Sum It Up
Emotions and money rarely go well together. Buying or selling a home is emotional and a large financial transaction. It’s important to remember Real Estate at its core is a business transaction. As a sales representative, a Realtor protects their client’s welfare in the deal. Good Realtors are fair but keep their client’s best interest as a priority. This means not giving away knowledge that can be used against their client but also giving the other side pertinent information that will affect their lives. It’s a delicate line to walk but a good negotiator has the balance needed to achieve it.
For more information, be sure to read some of my other blog posts including:
1 Minneapolis 2040 Plan. Out With Zoning, In With Innovation!
2 5 Ways to Showcase Your Home for Successful Showings
If you have any questions, please let me know. We’re always happy to help. You can give me a call at 612-889-6496 or send an email to [email protected].
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