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November 06, 2018 • Stay Connected!
         


QUESTION:  Buyer's broker sends a complete copy of the buyer's inspection report, to listing broker, as an email attachment. Listing broker calls seller and tells seller about it and seller tells listing broker that seller does not want to see the report and instructs broker not to forward the email. What should listing broker do?



ANSWER:  Listing broker should adhere to seller's instruction. Listing broker has an Agency Law duty to timely present all written offers and other written communications to and from the parties. However, there is no definition of "present" included in the Agency Law. Arguably, listing broker "presented" the communication to seller when broker described the email, on the phone, to seller.
 
This hardly solves the problem, however, that seller is trying to solve. Seller is trying to avoid being saddled with knowledge of the information included in the buyer's inspection report. This is an understandable goal. The problem is, when the email attachment is sent to listing broker, the information is likely to be considered as within the "actual knowledge" of both broker and seller.
 
While broker and seller may both choose not to review the inspection report, that may not shield them from liability if a subsequent buyer sues seller and listing broker, claiming there was information included in the inspection report, that broker and seller failed to disclose. During discovery related to that lawsuit, the suing buyer's lawyer will learn of the email delivery of the inspection report and on cross examination, seller and listing broker will have to attempt to justify why they chose not to review the inspection report so as to avoid making disclosure of information to the next buyer.
 
As for listing broker's role in this situation, broker should confirm, in writing, that broker notified seller of the email attachment and seller instructed listing broker not to forward the email. That written confirmation should be retained in listing firm's transaction file. Additionally, broker should advise seller, in writing, to seek legal counsel. Listing broker is not licensed nor insured to advise seller of the potential for liability related to seller's choice not to receive the inspection report and broker is not licensed nor insured to advise seller as to what seller must disclose. Broker should, however, recognize that seller's instruction to withhold the email from seller creates potential legal liabilities for seller and listing broker should advise seller, in writing, to seek legal counsel.
 
Additionally, listing broker should work with his/her managing broker to determine how listing broker will proceed. Even if seller chooses not to look at the email attachment, broker and managing broker may determine that broker has an obligation to review the inspection report and disclose "Material Facts" revealed by that review, to subsequent buyers (assuming the present sale ends in a sale fail). This is likely to make seller unhappy. However, if broker and managing broker determine that broker has an Agency Law duty to make disclosures, those disclosures must be made, even over the objection of seller. Broker and managing broker should be prepared to call on their own legal counsel for assistance in determining how to proceed in this situation.
 

 

The Legal Hotline Lawyer does not represent Washington REALTORS or its members. To browse through our database of past Q & A's, visit www.warealtor.org. Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Please submit questions to legalhotline@warealtor.org or leave a message at 800.562.6027. Please include your NRDS number.



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 Average Rates  4.83%  4.23%  4.04%
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  October 25, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.86%  4.29%  4.14%
 Fees & PointsHTML  0.5
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 Margin  N/A  N/A  2.77



  October 18, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.85%  4.26%  4.10%
 Fees & Points  0.5
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 Margin  N/A  N/A  2.77



  October 11, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.90%  4.29%  4.07%
 Fees & Points  0.5
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  October 4, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.71%  4.15%  4.01%
 Fees & Points  0.4
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 0.3
 Margin  N/A  N/A  2.76



 
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