Real Estate Disclosures Flashcards

Questions and Answers

The actions of the seller and broker represent all of the following EXCEPT:

Fraud

Gross misrepresentation

Unintentional misrepresentation (correct)

A violation of the license law

A broker representing the buyer must:

Withhold financial information about the buyer

Not share the buyer's confidential information with the seller (correct)

Tell the seller the buyer's ethnicity

Also represent the seller

A broker representing the seller must:

Tell the buyer about the seller's motivation

Help the buyer determine an offer

Work with the buyer to locate other property

Avoid giving false information to a buyer (correct)

A builder's new home warranty would cover all of the following EXCEPT:

Structural damage caused by flooding Signup and view all the answers

Is the listing broker liable to the buyer for estimating the property line?

Yes, brokers should only make statements they are sure are true Signup and view all the answers

Who is responsible for the buyer's actions after not being able to produce proof of cash?

The buyer Signup and view all the answers

What should a buyer's agent do upon overhearing the seller may accept a lower price?

Immediately tell the buyer and no one else Signup and view all the answers

A new home warranty would NOT cover which of the following?

Structural damage from outside forces Signup and view all the answers

What should the listing agent do after learning of a hidden defect in a property under contract?

Disclose it to all parties Signup and view all the answers

What must a property manager representing the landlord do?

Avoid giving false information to a tenant Signup and view all the answers

What is the next step if a property under contract was affected by a hail storm?

Informing the buyer's agent and buyer and discussing how to proceed Signup and view all the answers

Did the listing agent break her fiduciary duties by sharing the seller's willingness to take less?

Yes, the seller did not give permission Signup and view all the answers

A buyer's agent may negotiate for a relative or friend:

Only if disclosed to the seller and listing agent Signup and view all the answers

Adding a home warranty to the purchase contract can do all of the following EXCEPT:

Add a new home warranty of habitability Signup and view all the answers

Which statement concerning the listing agent's responsibility to the seller is true EXCEPT:

The agent is responsible for any losses to the principal Signup and view all the answers

If the seller provides inaccurate material defects information and the listing agent passes it on, who is liable?

The seller Signup and view all the answers

Nonmaterial information that could damage the seller's bargaining position can be disclosed only:

With the seller's written permission Signup and view all the answers

The broker working for the buyer must tell the seller:

If the buyer cannot qualify for a loan Signup and view all the answers

The listing agent working for the seller must tell the buyer of any:

Material or latent defects Signup and view all the answers

The property manager must notify the potential tenant of:

Environmental contamination Signup and view all the answers

What hidden defects should be disclosed in the Seller's Property Disclosure statement?

Any that would affect the buyer's decision Signup and view all the answers

When a property is sold 'as-is,' the salesperson is responsible for disclosing to the buyer:

All known defects Signup and view all the answers

When a property is sold 'as-is,' the seller is:

Required to disclose all known material defects Signup and view all the answers

When a property is sold 'as-is,' the seller must disclose:

Any known material defects Signup and view all the answers

When a property is sold 'as-is,' who is liable for disclosing known defects?

The seller and the listing broker Signup and view all the answers

When is the buyer legally obligated to provide true and accurate information related to her ability to meet the terms of the purchase contract?

Always Signup and view all the answers

When the seller sold her home, she was unaware that the house was infested with termites. What was the seller guilty of?

Innocent misrepresentation Signup and view all the answers

Which of the following are most likely to lead to a real estate license being revoked?

Failure to disclose material facts to all parties Signup and view all the answers

Which of the following is not a material fact that would require disclosure?

The buyer has HIV/AIDS Signup and view all the answers

Study Notes

Seller and Broker Responsibilities

Concealing known material defects, like a leaking roof, constitutes fraud and gross misrepresentation.
Sellers or brokers must not share confidential buyer information with the seller.
Brokers representing sellers must disclose all known material facts but can maintain the confidentiality of seller motivations.

Home Warranty Details

Builder's warranties do not cover structural damage from natural disasters, such as flooding.
New home warranties are only available for newly constructed homes, not resale properties.
Resale home warranties can reduce seller and broker liability for post-sale failures.

Broker Obligations in Transactions

Brokers should avoid providing inaccurate estimates, such as property boundary locations, and instead recommend professional surveys.
Brokers must disclose material facts to all parties, including hidden defects discovered post-listing.
Brokers representing buyers are obligated to share advantageous information learned during negotiations confidentially with their clients.

Liability in Transactions

Buyers are solely responsible for the veracity of their offers, influencing the acceptance of their bids based on inaccurate claims, such as claiming to have cash.
Agents can be held liable for misrepresenting known defects and must always convey accurate information.

Disclosure Requirements

Sellers must disclose all known material defects, even in "as-is" sales; this obligation persists regardless of sale terms.
Disclosure of any defects is not circumstantial; oral disclosures are insufficient, written ones are required.
Non-material information damaging to the seller's negotiating position requires written consent before disclosure.

Regulatory Compliance

Not disclosing significant facts could lead to license revocation; agents must be transparent with material information.
Specific characteristics, like the buyer's health condition, are considered private under federal regulations and do not constitute material fact disclosures.

Buyer and Seller Dynamics

Agents should not reveal confidential buyer information, such as employment or financial issues, to sellers without permission.
Buyer’s inability to qualify for loans must be communicated as it constitutes a material fact.
Sellers are not liable for defects they are unaware of, classified as innocent misrepresentation if discovered later.

General Ethical Considerations

Agents must prioritize ethical practices, including disclosing all known defects and maintaining confidentiality when required by law or agreement.
Puffing (exaggerating a property's qualities in advertising) does not constitute grounds for regulatory action but must still adhere to honest representation standards.

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Description

Test your knowledge on material facts, seller property disclosures, and warranties related to new and resale real estate. These flashcards cover important concepts, including fraud and misrepresentation in the real estate market.