Tennessee Realtor State Practice Exam

Which party is responsible for disclosing any known issues with a property in a real estate transaction?

1. The buyer

2. The seller

3. The real estate agent

4. The inspector

The correct answer is: The seller

In a real estate transaction, the seller is responsible for disclosing any known issues with the property. This obligation stems from the legal principle of full disclosure, which aims to ensure that potential buyers are aware of any significant defects or issues that may affect their decision to purchase the property. By law, sellers are typically required to provide a disclosure statement that outlines known problems, such as structural defects, plumbing issues, past flooding, or any other critical concerns regarding the property. This responsibility helps protect both the seller and the buyer; the seller avoids potential legal repercussions after the sale if issues arise that were not disclosed, while the buyer gains a clearer understanding of what they are purchasing. However, it's important to note that real estate agents and inspectors play different roles in the transaction. While agents can advise and facilitate the process, they are not the ones directly responsible for disclosing property issues. Inspectors conduct evaluations and may provide reports on the condition of the property, but they rely on information provided by the seller and their own observations. Therefore, the correct answer emphasizes the seller's critical role in transparency during the transaction process.