JL's Columbia SC Real Estate Blog: When in Doubt, Disclose

When in Doubt, Disclose

 I hear a lot of agents talk about the perils of disclosure in this business. What they are required to disclose and what they are not. I have also read several posts on different forums that posed the exact same question and handle to handle a more specific situation with their clients as well as other buyers and sellers. For me I operate off of a simple rule of thumb.

 When in doubt disclose. If you are not sure whether or not you should disclose a particular situation, then it is usually best that you disclose it. This becomes tricky in certain situations, especially when you are the listing agent. You must disclose all material facts, such as damage to a property that you know exists. This is something that can change whether or not a buyer will make an offer on a property and we should and are required to disclose all these material facts. Some other situations require that you have your client's permission to disclose information, but if you feel it needs to be disclosed then you should ask your seller for the right to do so.

 In other situations, such as a stigma on the property, then a lot of that depends on the state you are in. Say for example that someone has committed suicide in the home for sale, or it is a wide held belief that the house is haunted. In South Carolina, these are considered stigmas on the property and we are not required to disclose this unless we are specifically asked. Other states however, may have different rules that apply and I am not sure what the laws are for each of the states in this regard.

 Here in Columbia, it may be a deterrent some buyers to know that there has been a death on the property. However in certain markets, such as Charleston, SC it may not be a bad thing at all and you may want to disclose it publicly. In Charleston ghost tours are quite popular and houses down town that have a stigma such as that on the home, are actually a little more sought after in certain circumstances.

 With all this in mind, I have always been under the belief that disclosure is the best way when you are confused. Of course you should speak with your clients first where they are concerned. But the fact of the matter is that the truth always comes out in the wash and the last thing you want is something coming back to haunt you. People in general are curious being, and they will usually find out the truth in the end when they want to know. So, if you are upfront and honest from the beginning, then there is usually nothing to come back and bite you when they do their research.

 

www.jlboney.com

______________________________________________________________________________________________________

JL Boney, III - Columbia, SC Realtor - Coldwell Banker Residential Real Estate

 I specialize in Columbia, SC real estate and the surrounding areas, including Blythewood, SC, Kershaw County, Fairfield County, and Lexington, SC. If you are in the market to buy or sell a home in Columbia, SC or any of the surrounding areas, I would love the opportunity to speak with to see how I can help. Thanks for reading and feel free to contact me if I can be of service to you.

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Comment balloon 72 commentsJL Boney, III • April 06 2009 03:51PM

Comments

Always, always always!  If in doubt DISCLOSE.  You may indeed lose a sale, but, ending up in court you could lose your commision and more.  You could also lose a a good name! 

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) over 9 years ago

I agree, I had a friend that failed to discuss previous damage to a home due to a 100 year flood.  He was hurt by his failure to disclose.

Rick B.

Living in the wake of Hurricane Ike

 

Posted by Rick Blackmon over 9 years ago

I think you have a lot of good advice here.  I would imagine most problems arise due to a failure to disclose.  Oh by the way what does "material" mean?

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 9 years ago

JL..when in doubt dsmileisclose..it could come back and bite you.....

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) over 9 years ago

Disclose, disclose, disclose.  And that is all I have to say about that!

Posted by Melody Botting, You Deserve The Best (Broker Associate PenFed Realty) over 9 years ago

When taking the Georgia Broker's exam, a large portion is based on gauging one's ability to use judgment in real-world situations. Disclosure is no doubt an area that requires judgment. 

Posted by Steve Graham (Inactive) over 9 years ago

Whether it's a death in the house, a house that was used as a grow operation, a house that may have had a drug lab running out of it, etc., we are required to disclose.
We can't wait until we are asked, and if we're not asked, hope that we can get away with it.
If MUST disclose, and I think it's a good thing.  Some people may not be able to live with it, and then I would not be able to live with myself, if they were stuck with something like that.
Disclose, disclose, disclose, until you're blue in the face.

 

Posted by Sylvie Conde, Broker, Toronto Real Estate (Sutton Group-Associates Realty Inc., Brokerage) over 9 years ago

So I don't have an understanding on why someone would NOT disclose material facts. Hiding something never works it will eventually and most always be found. good post JL

Posted by Claude Cross, Charlotte NC Homes For Sale (Homes By Cross, Inc. ) over 9 years ago

sounds like what I'm studying for my broker's test.

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) over 9 years ago

I have often believed that there are no defects in a property for sale untill the buyers home inspector finds it. 

Sellers may try to hide and figure that if it was good enough for them, it should be good enough for the buyer, but today that not only harms buyers and sellers but agents too.

Disclose, disclose, disclose.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 9 years ago

We say disclose disclose disclose all the time in our meetings.  Plain stupid not to do so.....of course there are a few protected situations so that's different.

Thanks JL!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) over 9 years ago

JL...

I insist on full disclosure even when not required. The way I see it, it can't hurt :)

TLW...ROAR!

Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) over 9 years ago

Bill- I can lose a deal to keep my integrity.

Rick- I think just about all of us have at least heard of one or more horror stories.

Joan- I think the same thing. Material facts here are defined as facts about a property the would affect the decision of a buyer or seller.

Hannah- Yes it could.

Mel- I think that is enough.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

JL...

I agree with your thought that if you "wonder" whether or not to disclose, then you should disclose! Also... I think that in some states there are certain stigmas that may NOT be disclosed, such as a house in which a person my have died from AIDS. When in doubt, check with your broker.

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) over 9 years ago

Steve- I think a large part of it should be.

Sylvie- I think that disclosure is a good thing that will protect the parties involved.

Claude- I know why people try to hide things, but I never understand why they think they will get away with it.

Karen- Study it well.

Lenn- It can and does affect us, and I think it's a shame that people will put us and themselves in harms way.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Anna- Protected situations are of course different, but as for everything else, you see the title.

TLW- I think that's a great practice. Glad to see you back around the rain and I hope that you are feeling alright.

Richard- Aids in some states are a protected class, so that's a tough situation to deal with, but yes checking with your broker can clear up a lot.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

When in doubt disclose. Remember that it's your creditability that may be at stake.

Posted by Marty Remo, HV Home Team (RE/MAX Benchmark- Marty Remo-CDPE, E-Pro) over 9 years ago

Disclose, Disclose, Disclose. Thanks for the post.

Posted by Alice & Jim Hayes (Loveless Realty) over 9 years ago

I'm of the same opinion.  I'd rather scare off a potential buyer upfront, than have them suing you 2-months or 2 years down the road when they suddenly find out about the basement that's flooded for the last 16 years.

Posted by Alan May, Helping you find your way home. (Coldwell Banker Residential) over 9 years ago

That praise cannot be said enough "When in doubt, disclose!"

Posted by Maria Mastrolonardo, Realtor, Naperville, IL Real Estate (RE/MAX of Naperville) over 9 years ago

JL - always a good thing to remember, except in the case of HIV/AIDS and a few other small conditions.

Posted by Mike Saunders (Lanier Partners) over 9 years ago

I believe we all agree....when in doubt, disclose.  As William Freela stated (first commenter)  You may indeed lose a sale, but.....

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty, Martha Hilton, Broker) over 9 years ago

Agreed...always disclose. I tell my sellers the same thing every time when they ask me "Should I..."...YES! I have friends who i later represented in the sale of their home that sued their former agentS (both listing and selling agents) for NOT disclosing that a room was unpermitted. Never want to find myself in that situation.

Posted by Jim White (Keller Williams VIP Properties) over 9 years ago

The Closer or Discloser ---they both work hand in hand.

Posted by Jaime Tineo over 9 years ago

Anything can come back and bite you...but If something goes wrong, you would probably get a bigger bite from not disclosing than the opposite.

Posted by Paul Aragon (Coldwell Banker- Greater Valleys) over 9 years ago

Nicely stated and a good reminder.

Posted by George Bennett, Inactive Principal Broker, GRI (Inactive) over 9 years ago

When in doubt, disclose ~ sounds like some good advice to me.

Posted by Teral McDowell (Referral Patners LLC) over 9 years ago

Well said JL.  I've had sellers at the time of listing instruct me that there's no reason to inform prospects of certain issues, such as the fact that the garage floods in heavy rains, after all it's the dry season right now.  I tell them that it is to protect them even more than me that we must disclose.  When the seller insists on my "discretion", I walk away and let somebody else deal with that nightmare.  I agree, the second rule of real estate is location, location, location.  #1 is 'disclose,disclose,disclose.

Posted by Marian Goetzinger, Crystal Coast Real Estate NC (Pine Knoll Shores Realty 252-422-9000) over 9 years ago

Great information, In Columbia it is very important to make a good name for Realtors!  The best way is to be honest all the time!

Posted by Amy Gardner (Carolina RE and Inv. Group) over 9 years ago

OMGosh...if you do not dislcose the issues are soooo-huge. Great post.

Posted by Monica McNamara (MonicaC@Ocean-CitySales.com Ocean City Maryland) over 9 years ago

My motto is "Disclose early and often". I disclose everything. Fortunately our CA state forms includes something called a buyer material issues form that even allows an agent to make disclosures on a property.

Posted by Vickie Nagy, Vickie Jean the Palm Springs Condo Queen (Coldwell Banker Residential Real Estate) over 9 years ago

Before becoming a broker and instructor, I started out 30 years ago as a trial lawyer.  With the assumption there is an OK trial lawyer on the other side of the table from you, If you withheld anything (I know, the law generally says MATERIAL, but please remember it is by definition MATERIAL to the BUYER and his idiosyncrasy which is the way the fact will be presented to the jury) the mere fact you failed to communicate something that might be material to the buyer will generate a fishing expedition into why you should no longer have a reputation for truth and honesty (in most states this is a license issue as well). Generally it will take 2 years to get this on the trial docket, but don't worry about not having enough to do: You will likely receive 2 sets of interrogatories that must be answered under oath, at least a single demand for any and all material you have in your office or under your control (giving the box of records to your neighbor and telling him to hold them for you does not remove them from your ultimate control, so you'll have to produce them anyway). Deleting data from a hard drive may be a spendy gesture if they seize your key computers and have them electronically searched. All this leads to a deposition which can last a few hours. You'll sign off stating it was true and then finally some time later, you get to trial where your testimony should match up closely with your deposition.....  The beat goes on, but I think this is probably enough to illustrate just one reason to favor disclosure that is timely documented.

Posted by Walt Berhalter (All Islands Real Estate School) over 9 years ago

Disclose, disclosure, disclosure is my motto.  Don't hide past water problems and basement problems.  It will bite you.

Posted by Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239, Michigan homes for sale ~ yesmyrealtor@gmail.com (Real Estate One) over 9 years ago
Great reminder. I throw it out there and let the cards fall where they may. I continue to work forward and sleep good at night.
Posted by Connor T. MacIvor, SCVnest.com - (888)SCVnest (RE/MAX of Valencia CA - Paris911) over 9 years ago

My rule is simple, If you have to ask if you should, you already know the answer! Works for me.

Posted by Jan Simony (Mountain Realty) over 9 years ago

I always love the listing agents that don't want to get near an inspection because they don't want to hear anything they might have to disclose later... I've even had them refuse to allow me to email a copy of the inspection report during a contingency removal negotiation because "then they might learn something they don't want to know'>

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) over 9 years ago

JL~ Always disclosing what you know, is the only way to go!  What seem small and immaterial to you , may be a big deal to someone else.  Always provide the inofrmation and let them decide if it is a big deal or not!  If it is a deal breaker, then so be it!

Posted by Vickie McCartney, Broker, Real Estate Agent Owensboro KY (Maverick Realty) over 9 years ago

Yes, the three "D's" of real estate, DISCLOSE, DISCLOSE, DISCLOSE and while you are at it, don't practice law without a license.

Posted by Charles Kraus, GRI - Greater Annapolis MD Area (Coldwell Banker Residential Brokerage) over 9 years ago

Great post, great info. Always, always, disclose.

Posted by Jean Terry (Keller Williams Realty Spartanburg, S.C.) over 9 years ago

Great post, great info. Always, always, disclose.

Posted by Jean Terry (Keller Williams Realty Spartanburg, S.C.) over 9 years ago

We are the experts and often it is necessary to think outside the box just to be on the safe side.  When we treat others as we want to be treated, we reap all the rewards and loads of referrals. Sometimes we notice things like vacant lots sitting behind a house and while that is not on our disclosures, we know there may be the potential of a shopping center, apartment building, etc. which just may be built there. I like to check this out with the City or the County to find out the zoning for my buyers. The keener our eyes and ears, the safer our clients are.  Good discussion.

Posted by Carole Jacoby, Residential and Relocation Specialist in Fresno (Carole Jacoby & Co. Real Estate) over 9 years ago

Disclose any material fact. Period.  Follow the law, and you won't get in trouble.  More problems arise from non-disclosure than nearly anything else that can go wrong in a transaction.  Great post. 

Posted by Don Sabinske, Sabinske & Associates Inc. (Don Sabinske, Sabinske & Associates Inc.) over 9 years ago

I could not agree more - DISCLOSE!!!

I think this is the very first post in which 100% of the respondents are of the same thought process, and that's reassuring. We have so much to lose by not disclosing!

Keep up the good work!

Edith Schreiber - Dallas Texas

Posted by Edith Schreiber - REALTOR, ABR,e-PRO,CNS,RCC,CNHS over 9 years ago

Hi JL -- Your title says it all.  Great post.  I lived in Charleston for a few years and absolutely loved that town which has such a rich history.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) over 9 years ago

Yes, always disclose, but the ghosts can be dealt with. Find someone, like me, that can help them get 'home.' The house will feel very different.

BTW, ghosts don't make good house pets. The are always looking for energy from the livings... it's kind of parasitic. The win-win solution is helping the ghosts cross over.

Blissings...

 

Posted by David Franklin Farkas over 9 years ago

Good article, I live by the word "disclose".  I would rather say too much than too little.

Thanks!

Posted by Sandra Mathewson over 9 years ago

Definitely disclose.  If a deal is meant to fall apart because of a material defect then the earlier the better, rather than waste time and effort on everyone's part. 

Posted by Lora "Leah" Stern 914-772-4528, Real Estate Salesperson (Coldwell Banker, 170 N Main Street, New City NY 10956) over 9 years ago

I agree when in doubt disclose.  Get it out of the way and move on.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) over 9 years ago

Great post.  The one question I am always asking myself is: have I done everything possible to eliminate liability for myself. 

Posted by Joshua Talayka (Chase Internatinonal) over 9 years ago

Disclosure will keep you out of trouble and potentially out or court!

Portsmouth NH Real Estate

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) over 9 years ago

JL,

I am with Patricia. Disclose and it will keep me out of trouble.

Bettina

Posted by Bettina Settles, Your Indiana Connection over 9 years ago

Thanks for the great post.

This is more important than ever in our business. When people out there get desperate, they sue! So why not do as much as you can to protect yourself?

The brutal reality is that when things go bad, Buyers and Sellers will not care about you, but you MUST care about them. So please take this advice shared by JL to heart, and disclose, disclose, disclose!

Your business depends on it!

Have a Profitable Day!

Harrison Painter - Gladiator Real Estate Investments

b Harrison Painter - Gladiator Real Estate Investments - Indianapolis For Sale

Posted by Harrison Painter, New Media Consultant (GoGladiator Media) over 9 years ago

I couldn't agree more. Nice post! 

Posted by Jeff Daniel, Managing Broker, John L. Scott 360.581.9020 (John L. Scott Ocean Shores) over 9 years ago

Marty- Yes it is.

Alyce and Jim- Yes indeed.

Alan- I can completely agree with you there my friend.

Maria- It's a great one to keep in mind.

Mike- Of course there are exceptions.

Rebecca- Bill is a smart man.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Jim- I can see where that would be a bad situation to be in for sure.

Jaime- Yes they do.

Paul- I wouldn't want to leave it to chance.

George- Thanks for stopping by.

Teral- It has served me well.

Marian- I don't work with anyone that would put me in a bad situation.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Amy- Honesty makes a huge difference.

Monica- We like to avoid issues when possible.

Vickie- That sounds like a great form to me.

Walt- If you were a lawyer, then I'm sure you know how important this is and how bad it can be if you don't.

Russ- Yes it will.

Conner- That's the best way to be.

 

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Jan- That one works for me too.

Lane- I have seen this before also, but our contracts now require that we send a copy of the inspection report to the seller and the agent if there are issues involved that require negotiation. No place to run and hide here now.

Vickie- I agree, we can't judge how others will feel about anything.

Charles- That not being a lawyer part becomes pretty important as well.

Jean- Agreed, thanks for stopping by.

Carole- It's always a good idea to look into things, it shows that we're doing our job.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Don- Follow the law, it sounds simple enough doesn't it?

Edith- I am a little surprised that everyone is in complete agreeing, even though they should be. It's a good sign.

Chris- Yes it does, and Charleston is a great city. I was there this weekend.

David- I can see where that would help.

Sandra- Too much is far safer than not enough.

Lora- I can surely go along with that.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Gene- Yes sir!

Patricia- Court is always a good thing to stay out of.

Bettina- It's strong advice.

Harrison- Thank you for the support my friend, this is a very important topic and advice that should be taken seriously.

Jeff- Thanks.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Great post! I couldn't agree more. We should always disclose what we know. Not only court issues could arise, but client trust issues as well.

Posted by Jessica Jones, Destin Sandestin 30-A Real Estate (Sandestin Real Estate) over 9 years ago

I think when something comes to your mind, that means you are thinking about it. And that means you need to disclose. Go with the gut feeling all the time and be safe.

Posted by Ellie Viray over 9 years ago

Congrats on the feature~  you are right about disclosing!  What goes around comes around.

Posted by Jamie Boney (Mungo Homes) over 9 years ago

Jessica- Losing a client's trust is never a good thing.

Ellie- I think you are right.

Jamie- And you don't want it coming back around to you.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Congrats on the featured post.  I agree that if you are not sure, just disclose.  Its best to be safe than sorry later on.  And the fact that your city likes ghosts in the house is pretty darn funny.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) over 9 years ago

John- Better to be safe than sorry, that's always a great rule of thumb.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

About the death on the property, if you do disclose it I think you join the 'strangelings' of that genre.  Has nothing to do with selling the house, but these folks will tell you about the sellers spirit hanging around, etc.  I know what you mean it's just that you can't let these people side track you on an issue that's not regulated. Same thing is true for the high tension wires near a home - some say they are dangerous to live around but officially nothing has been proven there either.  Don't forget according to some your cell phone is also giving you cancer!

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) over 9 years ago

Hi JL-Catching up with all the posts I missed. The disclose factor is most definitely a good one otherwise it might come back to bite you. CONGRATS ON THE FEATURE!!! Great post. :-)

Posted by Sharon Lee, Retired and loving life (Sharon Lee's Virtual Assistance) over 9 years ago

Lyn- There are many things yet to be proved I suppose, thanks for stopping in.

Sharon- It can and will, thanks!

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

My thought is always: if I think I should ask my Broker about it, I usually already know the answer. If I question whether or not to disclose, it means I need to. Nice post and topic.

Posted by Kelsey Barklow, 423/948-9154, Marne Drinnon 423/202-2277 (Evans & Evans Real Estate) over 9 years ago

Kelsey- That's a good way to look at it.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

When it doubt, get it out.

Posted by Mike Henderson, HUD Home Hub - 303-949-5848 (Your complete source for buying HUD homes) over 9 years ago

Mike- Yes indeed.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) over 9 years ago

Participate