Misrepresentation, Fraud, and Disclosure

Real Estate Agent with RE/MAX Shoreline New Hampshire & Maine

I'm over in Nashville, Tennessee for a couple of days attending our yearly Tennessee Association of REALTORS Spring Conference.

Today I sat in on a talk by super savvy Colorado attorney/Realtor Oliver Franscona who talked about "Misrepresentation, Fraud, and Disclosure"

Oliver is co-author of a great book titled The Digital Paper Trail in Real Estate Transactions, a super book full of great advice and a CD with useful contract clauses and phrases to keep you out of trouble. I have a copy and recommend it highly.

Oliver talked for a couple of hours about the differences between misrepresentation and outright fraud. Basically misrepresentation is just what it say, making a mistake and giving someone incorrect information that may or may not cause them financial harm. Fraud is knowing something is wrong or incorrect and saying or doing it anyway.

He recommended that you advise your buyers always to get:

  • An appraisal, even if they're paying cash
  • A home inspection
  • Title insurance

Also you need to know your state's legally required disclosure requirments for homes where a crime has occured, drugs may have been manufactured, and other stigmas that may attach to the property.

Regarding physical condition of the property; if you know any material defects you should disclose them, i.e., results of previous home inspections, "repaired" property conditions, and other defects you know about that may not be readily apparent to the eye.

Make sure your sellers complete their own property disclosure forms; don't fill them in for them.

Be the source for the source of information, not the source of that information.

Oliver's four rules to avoid loan fraud.

  1. The Real Entire Deal
  2. That Is In The Contract
  3. That Goes To The Lender
  4. That Is On The HUD1

Ask lenders to put it in writing if they ask you to do anthing that seems amiss to you. If they refuse to put any instructions to you in writing that's a good sign they may be setting you up for problems down the road.

If you suspect someone may be trying to get you do something that doesn't pass your smell test you're probably right. Either don't do it or run it by someone with more experience that you trust and respect.

It's a jungle out there; be careful.

Posted by

Jim Lee , REALTOR®, Certified Residential Specialist (CRS)

http://JimLee.com  RE/MAX Shoreline

100 Market St., Suite #200, , Portsmouth, NH 03801 Phone: (603) 431-1111 x3801

Visit New Hampshire Maine Real Estate.com to search homes, get Seacoast area information, and find out how great living on the New Hampshire and southern Maine Seacoast really is.


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Ann Cummings
RE/MAX Shoreline - NH and Maine - Portsmouth, NH
Portsmouth NH Real Estate Preferrable Agent

Oliver is VERY good, and I always come away from his seminars with some great information.  I really like those rules on loan fraud - so many strange things that go on.


Mar 12, 2007 12:22 PM #1
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ
Jim,  I attended Oliver's presentation in Phoenix around this time last year - extremely useful information and we bought the book!
Mar 12, 2007 12:51 PM #2
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Jim Lee

Portsmouth NH Realtor, Portsmouth, NH
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