Question for a Realtor

[DVC Jen]

My DH is a manager dealing with relocating people from another state to here in Texas.

One of the people that is relocating is buying a house here in our town. During a conversation my DH had with this gentleman he found out where the house they are buying is in our town.

Then tonight it dawned on my DH - this man and his wife have a contract on a house that is VERY close to where this HUGE toll-way is going through.

Their realtor never told them the toll-way is coming in. If s/he had they would not have put a contract on this home - and they would have steered clear of that section of town.

My question is - is it legal for a realtor to omit information that will eventually affect the resale value of the house that is being purchased? Homes in that area have already dropped in value by tens of thousands of dollars.

I really feel for them.

 

[honeymom]

I am a realtor in the state of Arizona. I cannot speak for the regulations in your state. However, in this state it would be considered unethical not to share that with them if it is definitely going to happen. It would be considered a material fact.

 

[DVC Jen]

I am a realtor in the state of Arizona. I cannot speak for the regulations in your state. However, in this state it would be considered unethical not to share that with them if it is definitely going to happen. It would be considered a material fact.

That is what I thought as well. And as far as the Toll-way it is definately going to happen - construction will begin soon.

 

[becka]

They may be able to get out of the contract because of this information being withheld.

 

[Am_I_There_Yet]

I am absolutely exhausted right now, so bear with me...

Basically, in a court of law, it would have to be proven that the realtor knew about the tollway for her/him to be held liable.

We have a similar situation here in the suburbs of Houston and even though the path of this "super-highway" keeps changing, it'll be somewhere where I'm active and it's all over the news.

I'd have to be an idiot to not know about this freeway, so I tell people when I show in the area that there is a possibility that it could run near the subdivision.

I do it as much to cover my rear, as I do for my buyers.

Are they still in their option period? (Typically it's a ten-day period and the buyer pays $100 for it) If so, they might want to read their contract to see what their options are.

ETA: Texas has strict disclosure laws and a disclosure statement, but this is not one of the issues that is required to disclose on the form. You can find the statement on either TREC's or TAR's website.

 

[honeymom]

They may be able to get out of the contract because of this information being withheld.

They should also report the realtor to the Dept. of Real Estate and they should have no problem suing to have their earnest money/down payment returned if it was not disclosed.

 

[Pea-n-Me]

I thought it was a "buyer beware" type situation where information like that doesn't have to be disclolsed unless the buyer asks about it.

 

[honeymom]

I am absolutely exhausted right now, so bear with me...

Basically, in a court of law, it would have to be proven that the realtor knew about the tollway for her/him to be held liable.

We have a similar situation here in the suburbs of Houston and even though the path of this "super-highway" keeps changing, it'll be somewhere where I'm active and it's all over the news.

I'd have to be an idiot to not know about this freeway, so I tell people when I show in the area that there is a possibility that it could run near the subdivision.

I do it as much to cover my rear, as I do for my buyers.

Are they still in their option period? If so, they might want to read their contract to see what their options are.

ETA: Texas has strict disclosure laws and a disclosure statement, but this is not one of the issues that is required to disclose on the form. You can find the statement on either TREC's or TAR's website.

We have had a pretty tough re commissioner in Arizona. Basically, it would be your job to know about such a big project and you would probably be held liable for not disclosing. The burden of proof would be there for the plaintiff, but it wouldn't be too high a threshold to meet.

 

[Am_I_There_Yet]

I thought it was a "buyer beware" type situation where information like that doesn't have to be disclolsed unless the buyer asks about it.

It's pretty complex.

Here's an example:

In Texas, foreclosures require no disclosure. The lender never lived there; they know nothing about the property.

I used to live in a subdivision where the husband murdered his wife and is serving time in prison. In the meantime, the house has gone into foreclosure.

Even though legally the lender doesn't have to supply this info (and murder does have to be disclosed) and a realtor that isn't familiar with the area may not know, I do, and I had to tell people about it.

This is one of the main reasons that it's important to use a realtor familiar with the area you're buying in. A realtor not in the area, could very well not know that the murder took place. Houston is huge; murders are unfortunately common-place.

If this is a new situation, they really need to look at the last page of the contract. They need to know the default information and if there is an option period. Option periods are like gold here.

 

[DVC Jen]

It has been in the plans for years for this toll-way to come through town. There is even a detailed map you can get from the city that will show exactly where it is going.

The location is not changing and hasn't for quite a while.

I am not 100% sure exactly how close the house is that has the contract on it - if the subdivision is the one I am thinking of it sits back pretty far from the road that will eventually be an access road for the toll-way. But then again thinking about it - that field that is between the road that will be the access and the subdivision - is exactly where the toll-way will go.

My DH said this man and his wife were amazed at the "deal" they got on the house. He said it is a huge fairly new house and they got it for a VERY reasonable price. That makes me pretty sure it is in the area that is being affected - meaning one of those that has lost value dramatically because of the toll-way coming through.

I am not sure how far into the contract they are. DH contacted them this evening and told them about the toll-way... he couldn't tell by the mans reaction how he felt about it. He did say however that he would have to check into it. So we will see.

 

[Am_I_There_Yet]

We have had a pretty tough re commissioner in Arizona. Basically, it would be your job to know about such a big project and you would probably be held liable for not disclosing. The burden of proof would be there for the plaintiff, but it wouldn't be too high a threshold to meet.

Same here. Our RE laws are written to protect the consumer, not the realtor.

 

[Pea-n-Me]

The reason I know a little bit about this is because something similar happened to us when we bought a house. We asked about the open land across the street and the listing realtor - who was a longtime "townie" and member of the Conservation Commission - told us it was "conservation land" not to be built upon. A few days after we signed the P&S our lawyer called us saying he'd just seen an article in the local paper that in fact something "big" was going to be built on that land. Plans had apparently been in place for two years.

We'd already fallen in love with the house and chose to go through with it anyway, but both our own [out of town] realtor and our attorney said they'd back us if we wanted to get out of the contract since this information had not been disclosed properly, especially since we'd specifically asked about it. We were too young and naive to pursue anything against the listing realtor. I see her around town to this day and my skin crawls knowing she deliberately lied to us to make the sale.

 

[honeymom]

I thought it was a "buyer beware" type situation where information like that doesn't have to be disclolsed unless the buyer asks about it.

Our state is not buyer beware when it comes to material facts that might affect the value of a house. I think that a tollway running practically through your backyard would be a pretty significant material fact. And, I do think that the realtor would be held liable (in my state) for not knowing and disclosing something like this.

 

[honeymom]

The reason I know a little bit about this is because something similar happened to us when we bought a house. We asked about the open land across the street and the listing realtor - who was a longtime "townie" and member of the Conservation Commission - told us it was "conservation land" not to be built upon. A few days after we signed the P&S our lawyer called us saying he'd just seen an article in the local paper that in fact something "big" was going to be built on that land. Plans had apparently been in place for two years.

We'd already fallen in love with the house and chose to go through with it anyway, but both our own [out of town] realtor and our attorney said they'd back us if we wanted to get out of the contract since this information had not been disclosed properly, especially since we'd specifically asked about it. We were too young and naive to pursue anything against the listing realtor. I see her around town to this day and my skin crawls knowing she deliberately lied to us to make the sale.

Unfortunately, realtors like that one have given all realtors a bad name. She behaved improperly. Thankfully the rules and regulations protecting consumers have been strengthened in most states.

Something that I am seeing and don't like now that I am a realtor. Because of the slowdown in the re market, some houses now offer significant monetary bonuses to the buyer's agent (in addition to the earned commission). I don't think that is right. As a realtor, I want to show my clients the houses that best suit their needs, not the houses that offer me additional money. If I ever sold a house that offered me an extra bonus, I would have it applied to my buyers closing costs so there could never be any air of impropriety hanging over me.

 

[Am_I_There_Yet]

Unfortunately, realtors like that one have given all realtors a bad name. She behaved improperly. Thankfully the rules and regulations protecting consumers have been strengthened in most states.

Something that I am seeing and don't like now that I am a realtor. Because of the slowdown in the re market, some houses now offer significant monetary bonuses to the buyer's agent (in addition to the earned commission). I don't think that is right. As a realtor, I want to show my clients the houses that best suit their needs, not the houses that offer me additional money. If I ever sold a house that offered me an extra bonus, I would have it applied to my buyers closing costs so there could never be any air of impropriety hanging over me.

I never accept BTSA's and never will.

If the lender lets me, I credit it towards my buyer's closing costs. Otherwise, I ask that it be used to lower the sale's price.