Today’s True or False, “I am entitled to all information about a property.” Buyers believe this to be correct. Is the buyer correct? Let’s find out.
…all information about a property
Scenario: As a buyer, I am entitled to all the information my agent can find on a property. This includes adverse conditions on the property, any improvements, and a Comparative Market Analysis (*CMA).
*Definition CMA: A CMA shows where the house stands in relation to other properties for sale and sold in the area.
True and False
The True: Disclosure
The agent has to disclose to the buyer all adverse conditions that he/she is aware of. Remember we must treat you fairly and honestly. Disclosure of a hazard or other condition–such as lead–that could be of danger to the buyer must be disclosed. This includes improvements or changes to the property
Changes to the property
Example: The owner built a deck on the house as a do it yourself project. The deck has not been inspected. This must be disclosed.
Important: Keep in mind I said that the agent is aware of the problems. The agent may not be aware of a problem if:
- The owner did not disclose the problems.
- The agent had no way of finding out on their own. Example: Searches on the property did not reveal a problem.
Note: Informing the buyer of problems is one step. The buyer needs to perform due diligence. Get the house inspected by a professional.
The False
For buyers that believe the agent must provide a Comparative Market Analysis (CMA); bad news, you are not.
Asking the seller’s agent to give you such information is the same as asking the agent to work against the seller. The seller’s agent job is to get the highest price for the property. It is not to help the buyer pay the lowest price. Supplying a buyer with a CMA could sway negotiations against the seller.
Note: Agents that supply this information can be sued by the seller. If the seller proves that supplying the CMA caused the seller harm the agent is liable.
A Good Practice Gone Bad
Somewhere someone started this practice as a means to draw in customers and it stuck. The CMA exists for the seller’s agent to use. It is a method of pricing the property for sale, not for underbidding the owner.
Final Word
A buyer is entitled to information about the property. The buyer is not entitled to confidential information. A comparative market analysis is confidential information. A buyer can pay to have the property appraised.
Note: The lender will insist on it.
By the way, there is one way to get a CMA from your agent. Hire him.
Disclaimer
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
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