“Why Are They Selling Their House?”
February 7, 2011
The Most Commonly Asked Question.
Among all of the question that a listing agent fields at an open house, that one is probably the most frequently asked of them all. And why not? It's just natural curiosity to wonder why someone is selling their home. And who knows — the answer to that question may yield some good information if you're thinking of buying that home. After all, the Golden Rule of Negotiating is to gather as much relevant information as possible about the other party. Heck, I even catch myself asking the question of other agents all the time.
So it's a fair question, right?
The answer is yes, it's a fair question. But don't be surprised if you don't get a detailed answer… or any answer at all, for that matter. Here's why:
Required Disclosure versus Confidential Information.
When it comes to deciding what should be disclosed when they are selling their home, homeowners are supposed to adhere to the following general guideline:
The seller of a home is obligated to disclose any material fact that may impact the value and/or the desirability of the home.
That's an important sentence. Whenever there's a doubt about what information needs to be disclosed, that statement serves as an effective litmus test, since it's very black and white. But when it comes to discussing why you're selling the house, it's very important to apply that reason to the aforementioned test. Why? Because you (or your agent) could be unwittingly disclosing sensitive, personal information that you may not be required to.
If you're selling the home because it belonged to your Aunt Betty and she passed away at home, or you're moving because you discovered that your home is sitting on top of a mercury deposit, of course that information needs to be disclosed because it impacts the value or desirability of a home. But what if you're selling because you're getting a divorce? Or you've lost your job and are having difficulties paying the mortgage? Does that information have any real bearing on the value or desirability of the home?
Too Much Information.
When you sign up with a Realtor to sell your home, the first form that you should have filled in from that big stack is one titled “Disclosure Regarding Agency Relationships.” This single disclosure is very important because it outlines the responsibility of both the listing agent and the buyer's agent in their dealings with their clients. One of the most important statements in this disclosure is the following:
An agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above.
What does this mean? Simply put, it means the listing agent should probably not be talking about any of your personal information that doesn't have a direct bearing on the value or desirability of the home, unless you've approved them to do so. Chances are you may not care if everyone knows you're relocating because of an awesome new job opportunity. But the same may not hold true if you're selling because of divorce, or financial hardship — especially since many of the people who come through open houses are neighbors or friends. But you'd be surprised at how much information sometimes flows from that single question.
Have That Discussion.
Does your agent know how they're supposed to answer when they are asked why you're selling your home? Well, if you haven't had that explicit discussion with them, chances are they don't. During the course of developing a relationship with the sellers, it's almost unavoidable that the agent will become privy to sensitive and confidential information about them. And while common sense should prevail about what or what not to say, it's still important that you and your agent are on the same page, and that you've made it crystal clear to them what's OK to discuss, and what's not — all the while still adhering to those disclosure laws, of course.