One day not so very long ago, a family bought a house. It was a very, very fine house, with two decks in the yard, a garage for a couple of cars and a view of the Golden Gate Bridge that begged for a pool and patio where all in attendance could enjoy their very own Margaritaville.
The family set out to create an urban paradise, breaking ground and watching it slip, slide away down the hill that had a history of erosion. But how did the family not know? Was the broker blinded by the light-colored netting that was obviously interwoven into the soil? Had the broker missed the sloping floor in the guesthouse—a sure sign that the foundation fluctuated more than a marginal pop song on the Billboard charts?
What you know can hurt you
Apparently, the agent did know—as did most of the brokerage—that the home was built on shaky ground and, in failing to suggest a geological survey, was found to be responsible for repairing and restoring the mammoth mess.
Which raises the question—what exactly are you required to advise a buyer? Could water damage mean moldy molding and interior infirmity lurking in the walls—and if you see it, should you encourage further investigation?
Proceed with Caution
It turns out that you not only should, but that you are required to go one step farther whenever you see something that could adversely affect the value and enjoyment of the prospective buyer. This is not just a stipulation of the Code of Ethics of the National Association of Realtors, it is codified in case law from the California Court of Appeals.
If you fail to provide a buyer with proper precaution on anything from a sagging ceiling to subpar subfloor, you run the risk of being held financially liable for your lapse. Need more info? Wondering what the parameters are? Check out our video here.