Most of us were raised to be honest, because as mom and dad have always affirmed tous, “Honesty is the best policy”. The majority of us have been raised with this belief drilled in to our heads, that to be ethnical human beings, we should always be honest to ourselves and our neighbours. However, many of us lose sight of this basic mantra as we flow from children in to our adult and work lives. We get carried away by ambition, goals and meeting our career quotas -and sadly, honesty becomes a distant memory.
A large part of being a good person is being honest, and acting with integrity -both in our personal lives and in our work lives. Similarly, a huge part of being a good real estate agent has to do with honesty and integrity as well. As buyers, sellers and renters in the real estate field, we expect honesty. The question is, do we always get honesty?
Sometimes it’s difficult to tell the truth when numbers and dollars signs are flashing like the tempting lure of the Las Vegas Strip. It may be sometimes difficult to tell the truth, but if you want to be a successful and reputable player in the business, it’s a necessary part of the job. What comes around does indeed come around. So what are some truths that agents and sellers should ethically be honest about when it comes to unloading a property on the market?
• The truth about the sales price
• The truth about the property’s real condition
• The truth about the background and history of the property
• The truth about the credit history and worthiness of the client
• The truth about the style and layout of the property
The list goes on and is not limited to just the above. Have you ever had buyers’ remorse from purchasing something of significant value? Maybe you had moved in to a home that was sold to you with the appearance of being “perfect” and in mint condition on the surface, but only to find out weeks in to your residence that bits and pieces of the home started to break down. Cracks start to show through the seemingly perfect exterior, and the real face of the property starts to rear its ugly face. Ionce had a friend who bought a second hand baby stroller from another mom on a Facebook forum. The pictures uploaded online presented the baby stroller to be practically brand new. There were no wear and tears, and the seller explicitly stated that the stroller had only been used “a couple of times”. The price was second hand price and it seemed like the deal of all deals. Of course, my friend jumped at the chance, met with the seller for the physical transaction.Everything seemed normal, the seller graciously showed the buyer how to operate her new baby stroller, both parties bid adieu cheerfully, and they were off. My friend was overjoyed with the stroller at its steal price, but a week in to it,there came an accident. While her infant was in the stroller as mom and child ambled through a park, the stroller made a strange clicking sound and suddenly collapsed into itself - causing the baby to wail out in pain and sending shock waves through the mom. What had just happened? No long term damage was done to the child, but the mother was confused, terrified and filled with rage.She immediately called the seller and notified her of the incident, at which time, the seller hesitantly and sheepishly replied to her that there “may” have been a defect with the stroller but she had not used it in some time before selling it to the new mom, so she thought the defect had fixed itself! The seller had known all along that there was a defect with the stroller, but she with held the information, in hopes that 1.) The defect had miraculously healed itself,and 2.) She would be able to unload the defected product on to a new owner,hence leaving her own hands clean.
Ethical practice? Most of us would disagree to the seller’s behaviour and passionately disapprove. I mean, what if the same scenario were to play out in our own lives? The incident above is not unique, nor is it new,but it is something that happens more often that we’d like to believe. This incident involved a HKD $800 stroller and an (thankfully)unharmed baby, but imagine this same setting to play out with a property investment! What is one to do when so much is on the line?
This is a question and fear that plagues many residential sales. As a seller, what are you obligated to disclose about your home? Even if you are not legally obligated to reveal certain features, should you still and under what circumstances should you be (hand to bible) completely honest? The general consensus is that if you need to question whether or not you should disclose something, chances are you probably should because the harm in not disclosing information can land you in some serious legal and financial woes.
Whether you are a buyer or a seller, disclosures are a key part of your real estate negotiation and transaction.
First let’s discuss what a disclosure is in real estate terms. Disclosure statements (can come in a variety of forms), are the buyer’s opportunity to learn as much as they can about the property in question and the seller’s experience and history in it. Disclosure information can range from know ledge of bursted pipes and drainage systems, to paranormal activity, to information about a major construction or development project in the proximity. Disclosures serve to inform buyers properly of what they are getting themselves into, and also to protect he sellers from future legal action and responsibilities. It is the one proper chance for the seller to reveal anything that can negatively impact and affect the property’s value and the buyer’s feelings about it.
If you are still confused, we have compiled a list of what you (ethnically and legally) should include in your sellers’ disclosure: