When must adverse material facts be disclosed?

The requirement to disclose adverse material facts before an offer is made is rooted in the principle of transparency in real estate transactions. Adverse material facts are anything that could significantly affect a buyer’s decision to purchase a property; this might include issues like structural defects, problems with the title, or zoning restrictions.

Disclosing these facts prior to an offer ensures that potential buyers are fully informed about the property and its condition. This disclosure allows buyers to make educated choices without the risk of becoming involved in a transaction that could lead to dissatisfaction or legal issues later on. By providing this information upfront, real estate professionals uphold ethical standards, enhance trust with clients, and mitigate the risk of post-transaction disputes.

Disclosing such information only after an offer is made or before closing undermines the integrity of the negotiation process and could lead to serious repercussions, including legal action. Therefore, the best practice is to ensure that all parties are aware of significant issues as early as possible, which strengthens the overall transaction and protects everyone involved.