Ask Phyllis: a blog series of frequently asked real estate questions.
What is a material fact?
Dear Phyllis,
I really enjoy your column and believe I have a new scenario which you have not touched on. My aunt has her home listed and is moving to New Mexico. A Realtor who showed it was going to write an offer, but then emailed her Realtor that a registered sex offender lives on her same block. Apparently, they moved in several years ago. Although their address is registered on the database, they don’t live there. Her Realtor told her she must disclose this. I don’t see why, as they don’t live there. What is your opinion?
Marla
Dear Marla,
I appreciate your continued readership. I consider this a material fact and believe it should be disclosed. A material fact includes any information about a property that could influence a buyer’s decision or affect the price they are willing to pay. In other words, if a reasonable buyer would care about it, it warrants disclosure. Specifically, a material fact impacts value, desirability, or safety. In addition, it may not be easily observable and is known by the seller or the agent.
Real estate decisions should be based on current, verifiable facts. However, disclosure often depends on perception as much as certainty. Even if the information may be incorrect, a buyer could still view it as important. As a result, most professional real estate agents take a cautious approach. If a concern could influence a buyer’s decision, they treat it as a material fact. At the same time, how your aunt presents the information matters.
For example, your aunt can clarify the situation. She can explain that a registered sex offender appears in a public database, noted as living on her block. Â Then, she can note that, to her knowledge, the individual does not currently reside there. In addition, she should encourage buyers to conduct their own investigation. This approach simply states the fact that your aunt is aware of and encourages the buyer to independently verify the information.
