Imagine that Veronica, a Realtor, just got an offer on her first house listing in Pennsylvania. Bobbi, the buyer’s real estate agent, calls to let Veronica know the offer is on the way. While they chat, Bobbi asks, “Is there anything the buyer needs to know about the home?”
Veronica pauses. She has noticed a few issues with the place, but does she have to tell Bobbi about them? And if you’re a prospective home buyer in Pennsylvania, what type of information should you expect to receive from the seller’s agent (as opposed to from the sellers themselves)?
The seller’s agent has a limited duty under Pennsylvania law to tell the buyer or the buyer’s agent some information. The Pennsylvania Real Estate Seller Disclosure Act puts most of the burden on the sellers themselves, requiring them to disclose to the buyer any material defects in the property that they know about. This becomes important because real estate agents bring an experienced, fresh set of eyes to the property, and may notice problems that the sellers themselves were oblivious to or unaware of.
Understand that the seller’s agent is not responsible for guaranteeing the seller’s word. If the seller does not tell the buyer something important about the property and the real estate agent doesn’t know about it, the seller’s real estate agent cannot be held jointly responsible if the buyer later sues the seller.
The seller’s agent does, however, have to disclose to the buyer – or the buyer’s agent – any material defects in the property that the seller’s agent knows about. For example, if the seller’s agent knows that there is a pit in the backyard that used to be an old well, and that someone could easily fall into the pit, the seller’s agent needs to disclose this. Same goes for whether or not there is a leak in the roof, termites in the foundation, or a coming city project that will wipe out half of the front yard. See 68 Pa. C.S. Sec. 7310. City, town and county units of government cannot require sellers or their real estate agents to make disclosures other than those required by the Pennsylvania Real Estate Seller Disclosure Act. See 68 Pa. C.S. Sec. 7315 (a)(1).
The seller’s agent is also responsible to the buyer if the agent knows about a misrepresentation made to the buyer or the buyer’s agent during the sales process about the condition of the property.
If Veronica’s seller asks her to keep quiet about a material defect in the property, Veronica must explain to the seller that the law requires her to tell the buyer or buyer’s agent about the problem. If the seller is still adamant that the Realtor keep the information to herself, then Veronica’s ethical responsibility is to withdraw from representation of the seller in the transaction.
Veronica needs to tell the buyer or the buyer’s agent about the defect under law. Veronica also has a fiduciary duty to her client, the seller, to keep the information the seller deems as confidential (such as the seller's personal reason for selling or whether she'd be willing to come down on price) to herself.