A lender we know who does business in the Hudson Valley mentioned he’d experienced a recent rash of real estate agents incorrectly disclosing property taxes to a buyer. Whether a case of guesswork, laziness or outright fraud, real estate agents who fail to correctly disclose the actual costs of buying a house are committing an ethics violation, are not doing their job, and need to be held responsible.
In one instance, a real estate agent told his buyers the property taxes on a listing were $10,000. In actuality, the annual property taxes came in at $13,000. The difference turned up in the actual title search as the mortgage was being originated. It scrambled the lender’s calculations and added $250 to the young buyers’ monthly payment.
Fortunately for buyers, New York state law requires lenders to provide buyers with a closing costs list no later than three business days prior to closing. The document itemizes the amounts of each fee or expense to be paid at the closing table. Buyers should examine this document carefully to make sure all fees and charges are correct and as expected. If you have any questions about what an item is for, your attorney or lender representative will be able to answer them.
This is not a small deal. This is a very big deal as it applies to real estate ethics. As a broker, this is one of the reasons I carry what’s called “Errors and Omissions Insurance”, and impress upon my agents how important it is that they are honest and exact in quoting any costs or financial figures. To be anything less is unethical.
Property taxes are easy to clarify, either online, or with a brief visit to the town clerk’s office. (I never rely on the seller for tax information, as some home owners don’t really know exactly, or if they do know, often try to “fudge” it a bit.)
In the case mentioned above, where an agent under-disclosed property taxes to a buyer, that agent’s broker can and should be held responsible. The matter should be submitted to the broker’s Board of REALTORS® Ethics Committee, which will determine any fines or punishments.
For more information about closing costs, or to find out your home financing options, contact Barry Goldenberg, 516-398-9511 – email: email@example.com.