Let's say you’ve spent weeks, or maybe months hunting, and have finally found that perfect Virginia home to buy for your family. And it’s listed at a great price! Is it too good to be true? Well, you met the listing agent (sometimes known as the “seller’s agent”) and he seems like a good guy -- surely he will inform you if the property has problems. Or will he? Just how much about the property does the listing agent need to tell you under Virginia law?
You might be surprised to find that in Virginia, the disclosure obligations of the listing agent are minimal. If you really want to be fully informed about that “dream” property, it’s up to you, as the buyer, to look into it further. (And if you're the home seller, you'll want to keep reading to learn about what your seller must, or need not tell buyers about your property.)
If you are a buyer in Virginia and have entered into an agreement with your own real estate agent (sometimes called the “buyer’s agent”) your agent is required to inform you of your rights and obligations under the Virginia Real Estate Disclosure Act (found in the Code of Virginia §55-517 to 55-525). However, if you have no agent of your own and are working directly with the seller’s agent, then that agent has the duty to tell you about those rights.
Either way, you will find that the Disclosure Act does not include any buyer’s rights to expect a real estate agent to make any disclosures about, or make any investigations into, the condition of the property. Virginia's statute provides that once the agent has informed you of your legal rights under the Act, the agent doesn’t need to give you any other information, and the agent is not responsible for any failure to disclose information about the real property. (Code of Virginia § 55-523.)
The agent must, however, answer your questions honestly. Also, the limitation on disclosures only applies to information not already known by the agent. If the listing agent does know of any physical condition materially affecting the property (generally, any problem which might affect the property’s value or use), the agent needs to tell you, the buyer, about it as well. (Code of Virginia § 54.1-213.B.)
However, the agent is required to disclose facts only about the physical condition of the property itself -- the agent need not disclose anything about adjacent properties, land use regulations, or highways or streets near the property, even if the agent knows about issues or problems. (Code of Virginia § 54.1-2131.B.) This means that if you happen to visit the property during July, the agent does not need to inform you that the traffic in front of the home becomes a problem when the school around the corner is in session, even if the agent knows perfectly well that this happens every school year.
Of course, the agent’s actual knowledge about the physical condition of the property may be limited. The agent never lived there, and has no legal obligation to do independent research into the condition of the property. The agent can rely on the seller’s statements about the property (unless the agent actually knows seller’s statements are false).
“Wait a minute,” you might be thinking, “This is an honest seller who surely told the listing agent about any problems with the home!” Well, even if the seller is a forthcoming, honest person, many times the seller doesn’t even know about problems with the home. For example, if the seller is not an electrician, he may not recognize that the home’s funky wiring is actually dangerous. Sometimes, the owner is so used to dealing with an issue that he or she doesn’t consider it important - “That automatic garage door?, of course we need to get out and manually close it the remaining third of the way- that’s how it’s always been!”.
In some cases, even if the seller has disclosed nothing to the agent, the agent may have learned about issues with the property just by casting his or her expert eyes around the home. For example, if the agent tried out the garage door a number of times and saw it wouldn’t fully close, this would likely be material information the agent would need to inform you about.
There are a few situations under Virginia law where, even when the agent knows something about the home that might concern you, the agent is not required to tell you about it. Specifically, the agent does not need to tell you if a person with HIV lived on the property, or if a homicide, felony, or suicide occurred there.
The agent also does not need to tell you about anything that happened on the property that did not affect its physical structure or improvements. (Code of Virginia § 55-524.) This is often referred to in real estate lingo as a “stigmatized” property. So, even if the agent knows that a gruesome murder occurred in the home last year, or that a loud family of ghosts haunts the attic, unless there are bullet holes in the walls or the ghosts harmed the property, the agent does not need to inform you of these matters.
Another type of disclosure that the Virginia statutes require of real estate agents is to inform you who they are actually representing in the sale. If you are shopping for a home without your own agent, and are dealing directly with the listing agent, the listing agent must provide you with a disclosure stating that the agent is working for the seller. (Code of Virginia § 54.1-2138.) This disclosure makes it clear that no matter how friendly and helpful the listing agent is, the agent will be keeping the seller’s interests foremost, not yours.
As you can see, as a buyer in Virginia, you will probably not get all the information you’d want about a property from the listing agent. Since listing agents are not responsible to find out anything the seller hasn’t told them about, the only time the agent will need to inform you that your dream house is slowly sinking into a sand pit is if the seller has informed the agent of this fact, or if the agent knows about it by some other means.
The bottom line is that as a Virginia buyer, it is up to you to make sure your dream property truly is not too good to be true.
You need to thoroughly investigate the property on your own before you close the deal. Before you sign a purchase agreement, be sure it includes the right to inspect the property, the right to request repairs if any issues are found, and the right to terminate the contract (or be compensated) upon discovering any issues, or if any problems you find with the property are not fixed. Usually you will want to hire a professional inspection service as described in Nolo's article, "Getting a Home Inspection." The inspector will summarize the condition of the property in a written report, highlighting any concerns.
You should also make sure the title report for the property received from the title company handling the transaction and preparing your title insurance policy doesn’t contain anything of concern, such as liens or easements affecting the property. Easements will also show up on plats and surveys of the property. If no recent survey has been done, you may wish to have the property surveyed to determine exactly where its boundaries are and whether there are any problematic easements or property line issues.
You can often find out more information about the property’s physical condition and other issues affecting its value by doing your own inquiries. Ask questions of the seller, the neighbors, and anyone who might have knowledge about the property. Search online to find out things such as whether police were ever called out to that property, or whether a sex offender is in the neighborhood (sex offender information is found at Virginia's Megan's Law website.
It might take a bit of work, but by doing your own diligent inspections and investigations, rather than relying on the listing agent (or the home seller), you can help make sure that you end up with the home of your dreams, and not your worst nightmare.