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Speaking safe about neighborhood safety (and other matters of disclosure)

Posted by Moshe on April 2, 2014
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Often, buyers turn to me and ask one of the most frequently asked questions: “So, how is the neighborhood?”

These five words encompass so much: School system? Demographics? Neighbors? Safety?

Most buyers ask these questions because they view real estate brokers as local experts who can shed light and provide information on matters that are important to them and their transition into a new neighborhood. Often they are new to the city and look to an experienced broker for guidance and wisdom.

Many buyers are not aware of how tricky and dangerous such disclosures might be for a licensed broker.

Consider this – an innocent buyer approaches a broker at a public open house and begins a conversation. During their conversation, the broker is excited to learn that the buyer has no representation, thus making him a potential new client. The buyer indicates that he/she LOVES the property and has many questions about the building, neighborhood, school around the corner and mixed-income housing located on a nearby street.

Every one of these questions invites a deep dilemma for the broker. Speaking about the building might cause him to volunteer information about other owners (race, occupation, pets, personality). Discussing the school might cause him to describe who attends, what is the racial ratio and test scores in recent years. Speaking about nearby housing projects might result in the wrong information and impression about project dwellers. Talking about neighborhood safety is a complex can of worms.

The broker wants to engage the buyer and earn his/her business. The buyer is pressing on some of these burning questions, demanding guidance.

What should a buyer know:

1. According to the fair housing act, real estate professionals are not allowed to disclose any information that may sway buyers towards or away from a neighborhood. The act of “steering” may result in a broker’s license being revoked. A home purchase decision should be based on market value and not factors such as race, religion, ethnicity, etc. Buyers should do as much homework as they can about a neighborhood prior to looking for a home. Much of the information buyers seek is public record, and an experienced broker should guide buyers to do their own research and explain the limitations of disclosure conduct by which he must abide.

2. If you are not clear on how safe the neighborhood might be for you, visit the local police precinct and request an activity report. Such a report will summarize illegal activity in a neighborhood and help you decide if you are comfortable with your surroundings. If you are concerned about specific pockets or buildings, inspect the police reports carefully for disclosures of activity in those particular locations.

3. Walk around a neighborhood during different hours of the day and evening. Engage residents and visit local establishments. If you are a family, look for parents and strollers and gauge their comfort level while enjoying a family stroll. If you are a pet owner, walk to the nearest dog park, speak with other pet owners. These simple steps will allow you to have a first-hand experience of what it might be like to live in a neighborhood. By doing so you will avoid a situation in which your real estate broker is faced with the disclosure dilemma.

4. Every school should be willing and able to provide you with specific information. Respect the fact that a broker might not be able to elaborate beyond some very basic information in order to avoid misrepresentation.

5. Know that no matter how expensive the property you are looking to buy, an experienced, ethical broker will not engage you as a client if you insist on information that is wrong for him/her to provide.

The path of a healthy real estate transaction is littered with obstacles. Knowing what your broker can disclose should set the conversation in the right direction.

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