Section 15: Unit 1/Exam

What information about a property is the licensee required to disclose to potential buyers?

Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property

In states where full disclosure isn't required, it's the ______ responsibility to perform due diligence on the property.

Buyer's

Home inspector Murray is explaining to first-time buyers what he looks for during a home inspection. What is his primary goal?

Document health and safety issues that may affect both the cost and enjoyment of the home.

Why is a home inspection recommended?

It gives the buyer a snapshot in time of the home's condition.

What does "caveat emptor" mean?

Let the buyer beware

MAAP

Material, Adverse, Actual, Physical

Your buyer clients Josie and Terry made an offer that was accepted on a cute bungalow in a city neighborhood. They just received the inspection report and were delighted to see only minor condition issues. They'd like the sellers to replace two windows that have broken seals. In response, the sellers asked for a copy of the inspection report. What must you do?

You can only provide a copy if you get permission from Terry and Josie.

Caveat Emptor

buyer is responsible for performing due diligence on the property, and the seller isn't responsible for disclosing everything, or for protecting the buyer.

Physical

disclose any adverse material fact about the physical condition of the property

CLUE report

helps home insurance underwriters, but it help buyers determine a particular property has hidden issues

Material

it is important in deciding what course of action the buyer takes regarding the real estate transaction

Adverse

it is negative, usually regarded as any information that would reduce a property's value.

Actual

must have actual knowledge about the physical condition of the property

full seller disclosure

seller must put the buyer on notice