The market in my area is really hot due to lack of inventory of homes for sale. The demand is much greater than supply, due to historically low interest rates and a stable job market here inSilicon Valley. Lots of activity and multiple offers.
I had an interesting conversation with a prospective client the other day. Due to this flurry of activity, sellers are getting greedy. When people become overly greedy, they are tempted to do things that are not wise, in my experience.
This particular seller wanted to withhold information about certain restrictions by the HOA which may negatively impact investors. If the investors knew of this restriction, they would probably not be interested in the property. There are a lot of investors in the market looking for rental properties.
The seller wanted to withhold this information because they were concerned the buyer pool would shrink and they would get less money once the information got out. I was taken aback. This was a perfectly nice and seemingly honest person who was contemplating holding back on information which could harm someone. This person did not look like someone who would be thinking about holding back and screwing others. This seller’s rationale was that the sellers before them did not provide this information, so they would do the same.
What I had to explain to this seller was that simply because they wanted to withhold this information did not mean the information would stay buried. Information that this seller was trying to withhold would be the type of information any buyer would discover once they got in and started talking to other owners. It was simply a matter of time.
I had to explain to this person that people generally sue others when they get mad. People get mad when they are lied to. My job as an agent, besides selling the house, is to insure that the chances of sellers getting sued after completing real estate transactions with me are minimal. The prospect of gain by withholding information will be much less than the prospect of loss through a possible lawsuit. If I can’t protect my sellers from getting sued, then I have not done a good job as a listing agent.
Besides, in California, a real estate agent has a duty of honest and fair dealing which imposes a legal obligation to “disclose all facts known to the agent materially affecting the value or desirability of the property” to the party that may be unaware. So I had to explain to this person that I would be obligated to reveal this particular information in the disclosure package whether they like it or not; there was no way this information would stay buried.
I hope I got through to this person. Wanting to make more money is fine; but there are consumer protection measures in place which are designed to protect buyers from sellers who want to with hold information. Remember the Golden Rule folks.
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