What is Informed Consent in Real Estate?
What is REAL informed Consent in Real Estate?
I cringe when I read comments from agents about how they give the buyer an exclusive representation agreement at the time of contract or a disclosure as to who they really represent after buyer picks the house they want to buy.
It’s a bit late don’t you think?
After showing homes, learning about the degree of buyers motivation and the money in the buyers pocket it is too late to slip in a exclusive agreement or agency disclosure.
Letting buyers know about any choices or conflict of interest should never be done after the fact.
It is simply too late for the buyer to make an informed decision, so they are forced to just go along…
Real Estate definition of informed consent
Informed consent is an agreement by a party to a contract or an element of the contract made AFTER the party has been advised of all material facts.
The issue arises commonly in the context of real estate agency disclosures. Real Estate licensees can no longer simply point to the client’s signature as evidence of their “informed consent”. It needs to be more. Essentially it calls for a full and complete explanation to be given sufficiently that the client will truly understand their options in order to make an “informed” decision.
So…what is a Material Fact?
A material fact is one that in the buyers opinion, is so substantial or so important to the property value, that if known to the buyer, would have influenced the buyer to offer less money or reconsider the purchase altogether. OR maybe even change agents so they are truly represented.
What matters is the BUYERS OPINION and not the opinion of the agents or the seller. What one buyer may see as unimportant does not mean that all buyers will feel the same.
Giving a home buyer an agency disclosure or agency agreement at the time that they are ready to make an offer is NOT informed consent. The home buyer needs to understand their choices before they make a commitment.
Finding out the truth too late is not “informed consent,” it is called misrepresentation.