There's been a great discussion going on elsewhere on this site about when and whether disclosures are in order, and what may be concealed during a real estate transaction.
Most brokers in most states agree that disclosure of ALL issues material to the consideration to be paid in a real estate transaction are required (your state's mileage may vary--I am specifically referring to MY great state of Arizona).
A question was posed whether it was required to disclose that decades ago, a fire necessitated a complete remodel of a home, prior to the seller's ownership of the property.
Well, how did the seller know about it? Through disclosures from the previous seller, most likely. Maybe the neighbors as well.
It was also stated by an observer that brokers were too worried about protecting THEIR interests, and tended to over-disclose.
Accurate disclosures protect broker AND CLIENT's interests.
When there's a lawsuit, EVERYONE gets turned upside down to see who has the deepest pockets. That's usually the broker . . . but not always! And at the end, everyone's bloodied and bruised except the attorneys. Who needs that time, money, soul and reputation-sucking experience?
But but but . . . what about disclaimers? Okay, in a perfect world, you disclaim and advise outside investigations, sure, absolutely. HOWEVER . . .
Disclaimers do not always protect the broker, or the seller. In event of outright misrepresentation or concealment of a material fact**, they won't protect the seller--and E/O won't cover the broker.
In AZ, brokers are advised as part of risk-management education that if the seller won't disclose everything material and adverse that they are aware of, to drop that seller and if necessary, advise a prospective buyer why. If it's material and adverse, and not expressly protected by law . . . it's NOT confidential!
We have frequent occasion to re-sell properties where the seller was originally our buyer, and we have the prior seller's disclosures on file . . . if so, we add pages to the current seller's disclosure to include information provided by the previous during that seller's purchase. Our seller is disclosing what he knows, what he was told by previous seller, how he investigated and what was discovered at that time.
If you were buying a 50 year old property and you could have access to information from the previous seller's disclosures going back 20 years, would you want them? I would. It's something that can't always be discovered in public records.
An informed transaction is a solid transaction that won't fall out or be subject to renegotiation when the buyer finds out from Ol' Granny Gabby down the street during inspections that the house burned to the frame in 1990 and the remediation company's contractor license was revoked in 1992 for numerous complaints about using bad materials or shoddy workmanship. What was 'code' then as opposed to now? Would having to update to today's standards be material to a buyer today? Sure.
The buyer can then figure out if the deal makes sense at that price.
**What IS material, anyway?
The real question is: what is material TO THAT BUYER AT THAT TIME?
I don't want tweakers, busybodies or folks who hate music next door. That's material to me.
Because I am going to be singing over here.