What do Real Estate Agents Have to Disclose?

There are many different disclosures real estate professionals are required to make in New York State such as agency disclosure, property condition disclosures, material defect disclosures (if known), affiliated companies disclosure and disclosures about the general area.

New York State Agency Disclosure:  A real estate professional in New York State is required to disclose, in writing, for whom they are representing at the first “substantive contact”.  “Substantive contact” is subjective, therefore the interpretation of the term varies.  Suffice it to say, a real estate professional should disclose who they are representing at their earliest opportunity.  This is required and necessary so the principal parties, the buyer and seller, have full knowledge of who is their representing their interests, and, who is not. 

Buyers and sellers of real estate should ask their real estate professional about agency disclosure and how it impacts and benefits their relationship. 

Material Fact/Defect Disclosure:  Real estate professionals are required to disclosure any material defects of a property that are made known to them or should be reasonably known to them.  For example, if there is a water line around the interior basement wall of a home, a real estate professional should inquire and report back to the buyer with an explanation.  Reasonably, what caused the water line? 

While real estate professionals are not structural inspectors, contractors or engineers, they do have the requirement of being reasonably aware within their field of expertise.  Asbestos insulated plumbing is an example of something a real estate professional should recognize and disclose the existence of.

For topically related information, please see the blog “What is a Home Inspection”.

An example of a “material fact” might be a shed that was built which overlaps the property line.  That would potentially become problematic for the buyer, the lender and the title insurance company.  If such a condition should be known by the real estate professional, this should be disclosed.

New York State Property Condition Disclosure:  This is a six-page document with 48 questions that a real estate professional provides a home seller in advance of the property being marketed for sale.  This must be filled out by the seller, who must disclose any defects associated with the property that the seller has knowledge of.  There are certain exemptions to the New York State Property Condition Disclosure Law such as foreclosure, estates, divorce (if one person sells a property to a former spouse), condominiums, trusts and others.  Your real estate professional will guide you through this process.  A home buyer has the right to review the document prior to making a written offer on the property.

Various disclosures can be a bit confusing to both home buyers and sellers.  However, a competent real estate professional will guide you through them and be a source of information and leadership.