Disclose or not to disclose? THAT IS THE QUESTION...

Real Estate Broker/Owner with Nevada Perfect Homes B.58356 PM.163860

How many times have you been representing a buyer, completed the inspections and found serious issues. Next, the deal falls apart because the seller refuses to deal with the repairs. So, the next thing you know, the property is back on the market, no biggie right?

Well… Did you ever wonder if the selling agent bothered to make sure this negative information on the property was disclosed to other buyers? Then comes the question, can you do anything about it if it was not passed on? Do you, as the buyers agent have the authority do make sure another buyer is not harmed due to a failure to disclose known damages?


As REALTORS, we have a duty to disclose all issues that we know about a property, I know I always do 100% of the time. Even when the sell does not want this information disclosed we are bound by our REALTOR code of ethics to make sure this happens. But how many listing agents actually make sure a report that has been provided to them from the first transaction, makes it to the next buyer?


In the State of Nevada, I am required to disclose everything I know about a property. When as a listing agent I am given a copy of an inspection report, I now have “CONSTRUCTIVE NOTICE” and it can now be proven that not only did the owner know and now must disclose but so do I. In fact in the State of Nevada failure for a seller to disclose can result in “treble damages” (that is three times, PLUS the cost of the repairs). Failure for me as a licensee to disclose can cost me my licenece, a $10,000 fine, and a law suite that I will lose.

The HITCH – How does the next buyer find out?

If I am a buyer’s agent on the first transaction, that discovered the issue, and I provided that report and information to the seller’s agent… How do we know that was passed on to the next buyer? If I call the next buyer’s agent, I could be charged with interfering with the agency of another Broker and lose my license. If I wait for the transaction to close and then go to the buyer to ask if anyone disclosed the information, I have now allowed the buyer to be harmed and it will take time to resolve the issue.

The Answer?

Be ethical, disclose everything you know. I have had a number of deals with a number of issues, and by disclosing up front they never killed my deals a second time. Disclose it in the MLS, post the report (if allowed) in your MLS. When an offer or call comes in, talk to the other agent about the issue. Yeah, I know, OMG, an agent that picks up a phone and address an issue, how novel. Do what you can to address it up front.

How to fix this if you are that first buyer’s agent??? That depends on your local laws, talk to your legal counsel, BEFORE you do anything and make sure you are in compliance… Yeah, get them lawyers involved on the front end, and hopefully stop problems in the end.


Bottom line is, DISCLOSE, DISCLOSE, DISCLOSE… Make our profession a better one.

Comments (3)

Scott Baker
www.eHomeReports.com Coldwell Banker Realty - Liberty Township, OH
Realtor Homes for Sale Cincinnati/Dayton Ohio

It really is that simple, if you know about it you disclose it. Only hurts you if you don't disclose. I tell my sellers, disclosure is a good thing, not a bad thing.

Thank you

Mar 06, 2010 04:54 AM
Ron Trzcinski, 410-935-5844
Century 21, The Real Estate Centre, 410-665-0200 Office - Nottingham, MD


I agree that if an inspection were done, then the listing agent should disclose, as material facts, the defects which were found, to any potential buyer.

I do not believe that a Buyers Agent, who is no longer associated with that house, should interfere with the listing agent's responsibilities nor that he should act as the enforcer of such responsibilities for subsequent potential buyers.

Mar 06, 2010 05:11 AM
Dr. Paula McDonald
Beam & Branch Realty - Granbury, TX
Granbury, TX 936-203-0279

Amen to that Richard.  No matter what - EVERYONE should disclose.  Thanks for your post.

Mar 06, 2010 05:45 AM