Bank owned, disclosures, and just out right lies (What is a material fact)

By Todd Clark (Broker/Sales Coach) 503-524-9494

If you are a buyer and have ever looked at a bank owned property, then you know that the properties are sold as-is. But, in Oregon we have disclosure laws that says as a seller you have to disclose any known material defects that may affect the value of the property. But, the banks don't have to give a disclosure. But, here is where I think these banks and sometimes their agents are using this law in a very unfair practice.

When you have a property that is for sale, sometimes you have a fail sale because of an inspection. During that inspection a material fact that came up and would affect the value of that property really should be addressed or told to the next buyer, especially when they ask. But, for some reason these banks and their agents feel they can hide these facts and hope the new buyer won't get an inspection.

I've witnessed one agent that when asked directly about a certain item that they knew was a problem out right lie and say they didn't know anything about that. How do I know? The previous buyer had send me an email with the other agents comments about the defective item and said the bank was not willing to repair it even if it meant the loan not going through. My buyer almost spent $400 on an inspection just to find out that their loan wouldn't go through either because this other agent lied about the furnace.

This is just one of the reasons I tell my buyer that even though the property is being sold as-is, it is very important to get an inspection. My question is, should a listing agent that now knows a material fact about a property be required to share that information with a potential buyer, especially if they are asked directly about that item?

If you are a buyer, make sure if you are buying a property that is sold as-is, you still need to get an inspection, because even if sold as-is, you will want to know what potential problems you are walking into.

Todd Clark - Broker / Sales Coach
Palazzo Realty Group
Phone: (503)524-9494
Fax: (503)622-8739

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©2009 Todd Clark - Bank owned, disclosures, and just out right lies (What is a material fact)