One of the key players a homebuyer will encounter in an effort to purchasereal estate usually will be the real estate broker. Simply put, the brokeris a licensed professional who is in the business of selling real propertyon commission for a percentage of the agreed price or a specified fee tobe paid by the seller.It is important to understand that the broker isan agent of the seller and has certain obligations to the seller which aredescribed in the broker’s agreement.

A homebuyer must be cautious when dealing with the seller’s broker andshould understand that the broker represents only the seller and does notowe a fiduciary duty to the buyer.

A seller’s broker is obligated to givethe seller the benefit of his knowledge and advice, obtain the best possibleterms with regards to the sale, and keep the seller fully informed of allmaterial facts which come to the broker’s attention with respect to thetransaction. However, the seller’s broker owes no such duty of good faithand loyalty to the buyer under Massachusetts law. Very often the brokerserves as a “middle-man” throughout the negotiations and the buyermust be aware that the broker does not represent both sides. In such cases,the buyer may want to hire an attorney to represent his interests throughoutthe transaction.

One of the most common problems a homebuyer encounters when purchasinga home concerns the seller or broker’s oral representations about some conditionof the property which later turns out to be misleading or untrue. The generalrule is that when asked about a specific condition, the seller or brokermust answer truthfully and may be held liable for representation which turnsout to be false. An example would be telling the buyer that the roof doesnot leak when, in fact, it has leaked for years. However, the seller orbroker ordinarily has no obligation to disclose defects affecting the propertyif not asked. For this reason, the wise buyer should meticulously inspectthe property and ask a lot of questions concerning its condition.

In dealing with misrepresentation by the seller or broker, the buyerhas to separate fact from opinion. A buyer has no cause of action againsta seller or broker who offers his mere opinion or engages in “salestalk” which is misleading. A broker who tells the buyer that the houseis “well build” can not be sued if the foundation later cracks.However, if the buyer specifically asks about the condition of the foundationand the broker does not reveal the presence of cracks, an action may bebrought for fraud or deceit. In addition, in some instances, a buyer isprotected from such misrepresentation by the Massachusetts Consumer ProtectionAct. In distinguishing between fact and opinion, a court will look at allof the circumstances of the particular case including the sophisticationof the parties involved. Retaining competent legal representation at anearly state is an effective way for the homebuyer to avoid numerous pitfallswhich may be encountered throughout the course of the transaction.

Related articles

A Homebuyer’s Worst Nightmare  A Lesson in Title Insurance

A Homebuyer’s Worst Nightmare A Lesson in Title Insurance

Title insurance for your home is critical to make certain that you are the actual owner of your property.  Most home owners do not think about protecting the title to their home.  This story will help home buyers understand the importance of title insurance. A slight...

Tax Savings for Home Owners

Tax Savings for Home Owners

As predicted in the Mortgage Almanac's winter issue, President Clinton and the Congress have agreed on legislation that gives home owners much bigger savings on capital gains taxes when they sell their homes. Until this year, only home owners 55 years of age or older...

Special Considerations When Buying Condominiums and Town Houses

Special Considerations When Buying Condominiums and Town Houses

Connecticut, Florida, Massachusetts, New York, North Carolina, Rhode Island and South Carolina residents can use our mortgage locator service by clicking purchase or refinance and completing the on-line application. A loan officer who specializes in condominium and...