The importance of full disclosure

An agent that lies for you in order to achieve a sale, is certain to be an agent that also lies to you. These types of agents are not selectively unethical.

It has been reported this week that a New Zealand based real estate agent has been fined $35,000 for lying to a prospective buyer about the true condition of a property he was selling. The agent in question told the eventual buyer a previous contract had fallen through due to financial reasons, rather than the truth it has been due to a negative building inspection.

Steps had been taken between the two contracts to conceal (rather than repair) significant damage and rot within the home.

It is not known whether the previous owners of this property will also face penalties.

At Johnson Real Estate we believe in the need of Full Disclosure in any sale. Agents have not only a legal responsibility to their clients but also a moral responsibility. Although it could be argued that the agent was ‘doing the best for the seller’ this type of practice is what continues to reinforce the negative opinion many Australians have of our industry.

As a seller, you may be tempted not to disclose, or attempt to hide a known issue with your property. Hiding it often seems like an easy solution. However, this can quickly grow into a problem, often significantly larger than the original issue.

When selling a property, full disclosure of all potential problems prevents the inevitable discovery of the issue, whether major or minor. For instance, the chances of concealing large wood rot or termite damage from an inspector are no better than concealing a history of murder.

A seller asking an agent to conceal facts regarding a property is in essence asking the agent to lie. Yes, agents are employed
to act on behalf of the seller, but it is hard to think of a situation where lying on their behalf is in the seller’s or the agent’s interest.

If an agent is prepared to lie to others, it’s not hard to imagine the agent will also lie to the seller. Regardless, if the parties involved in a property sale lie, they are most often found out.

A simple rule of thumb: If in doubt – disclose. All issues are easier to negotiate if disclosed up front.