Disclosure in Real Estate today is practiced on many different levels. Disclosure is one of the five basic tenets of fiduciary responsibilities the agent has to the principal (buyer or seller). Agency disclosure is paramount to fully understanding the relationship the agent is to have with the principal. There are several other important facets that disclosure plays in the world of Real Estate.
It always is the duty of the agent to keep the buyer or seller fully informed of all the happenings that occur during any transaction. Just as importantly, material facts discovered by the agent must be disclosed to the buyer or seller. If the buyer has some new found difficulty in securing a loan to purchase any property, the agent must disclose this to the other principal in a timely manner. If it is the buyer's intention to flip the house (resell for profit in a short time), the agent must disclose this to the seller also.
Agency disclosure is another responsibility the agent has to the buyer or seller. The buyer or seller needs to know what level of service he will be receiving from the agent. Then he will be able to make an educated informed decision as to whether he will proceed with the agency agreement. Most States have agency disclosure laws on the books. These laws dictate when, how, and to whom real estate agency disclosures are made, as well as the forms they are written on.
Agency disclosure will help clarify how the interests of each party are affected. If you are a buyer and you have a buyer agency agreement in place, you can be relatively assured that your interests will be protected. If you are working within a dual agency agreement, the waters are muddied and material matters will not be so clear.
Just as material facts regarding a property's condition warrant disclosure, so too are those findings relevant to the environment. It is vitally important to remember that an agent may be held liable if he should have known about a condition but the seller failed to disclose it. An agent who works in a locality where ground fissures are common is expected to disclose that information to the buyer, whether the seller mentioned it or not. It is the agent's duty to know about conditions such as toxic waste dumping, underground storage tanks, contaminated soils, nearby nuclear facilities, and other possible health hazards.
A Real Estate Agent should always be responsible for the statements they make. Is it your opinion or a fact? Many times the buyer or seller will ask the opinion of their agent. The agent may offer their opinion, but two caveats must be maintained: The agent must let it be known that it is strictly an opinion, and there must be no intention for deception.
Disclosure is required for a successful transaction. Buyer and Seller Agents are expected to perform full disclosure by their clients, thus insuring the buyer or seller incurs no surprise along the pathway to an uneventful closing. Keeping your client as well informed as possible should be at the forefront of any agent's daily agenda.