"So how do you like the neighborhood? You know we have to have a good place for our kids and us." the buyer asked the agent upon entering the property they were considering buying.
"Well, there were a few robberies in the last few months, and some domestic violence in the neighboring streets." replied the agent.
Was this response proper by the agent to the potential buyers?
Yes it was. The agent knew of an event that might pose an issue for the buyers, thus the agent has to disclose what they know.
Remember, the key is to MAKE THE BUYER AWARE of what you know, to protect your client, as well as yourself in the real estate transaction. If you do not know the answer, then others might.
If, for example, the agent does not know that the area has problems or perhaps might pose a threat or a "deal breaker" for the buyers, then the agent needs to let the buyers know that they can contact their local police department and ask questions, or simply search the internet for their statistics.
Proper search terms would be, as an example:
Neighborhood Crime in _________ (fill in the blank with the town, city or zip code)
Safety Neighborhood Statistics in _______ ( fill in the blank with the town, city or zip code)
What is the Crime Index in_________.... You get the idea. Just search the terms of your questions. There are FBI reports, sex offender reports, and a huge variety of statistics right in front of you.
Also, many title companies can provide with a property profile statistics for schools, businesses and other important factors as well.
Remember, to tell them what is important to THEM, so you are truly there to help and do a good service.
Sorry, but I am not looking at "one small corner" of the facts. I also am not recommending dishonesty, nor did I say "only do your fiduciary duties." I am not suggesting hiding things. Quite frankly I am thoroughly disgusted with the dishonesty and self-serving practice that pervades this industry. I am suggesting simply that just "being honest and telling everything" will not keep the agent out of trouble. Your recommendation to disclose everything would not be a lawful response under several conditions in the state I practice in.
I agree that there is a large body of law to deal with... but your generality is simply not true in every state and in every situation.
This is also one of the examples I'm thinking of... are you qualified to advise licensees in every state to "tell it like it is?" Perhaps honesty would require an acknowledgement that you are not intimately familiar with real estate law in all 50 states.
Note that I said "could be wrong" not "would be wrong." I can tell you this: if an agent practices in my state using the "tell everything" advice you seem to be offering, he or she will eventually end up in court. Perhaps you would be willing to defend him or her when the time comes. Personally, I'd rather not end up there in the first place.
Not understanding the law, fidiciuary duty, agency, etc. will create a lot more of a mess than giving thoughtful, accurate responses.
Perhaps you can give a specific example and the state you are referring to: in terms of where the disclosure is a material fact to the contract and revealing it is against the law, and non-disclosure can mislead or cause damages to the client, but if you were to disclose it you are violating the law. I would love to hear a very specific example, and let us go from there. Of course, please do not use any maritime, military, attorney or governmental top secret examples, because that is obviously different, and I highly doubt the forum readers here are looking for something on that issue. The basic standards of good faith, and fair dealings as well as disclosures, and non-misleading issues are the core to the laws. I am aware, that Delaware is different in a lot of their laws and how they enforce the laws, and record keeping in the courts, but even there, the main laws about honesty and disclosure will not subject you to punishment. So, I am looking forward to your example...If you have a specific statute in mind, feel free to insert it into your explanation as well. Thanks.