A real estate professional operates under a fiduciary duty, a legal and ethical obligation to act in the best interests of their client. This responsibility establishes a framework for trust and service, but it also creates clear boundaries for what can be disclosed about a property or a transaction. The limitations on what a realtor can share are governed by state licensing laws, federal regulations like the Fair Housing Act, and client confidentiality. Understanding these restrictions is important for consumers, as an agent’s silence is often an adherence to legal and professional mandates, not concealment.
Limits Based on Agency and Client Confidentiality
The most fundamental restriction on an agent’s communication stems from the fiduciary duty of confidentiality owed to their client, whether that client is the seller or the buyer. Any information shared with an agent that could weaken the client’s negotiating position must be kept strictly confidential. This obligation is central to the client-agent relationship and persists even after the agreement has terminated.
For a seller’s agent, this means they cannot disclose the client’s true motivation for selling the property, such as financial hardship or a job transfer deadline. Revealing this information would give a potential buyer an unfair advantage during price negotiations. The agent also cannot divulge the lowest price the seller is willing to accept, as this is considered private negotiating strategy.
An agent representing a buyer operates under the same principle of protecting their client’s position. They are prohibited from disclosing the maximum offer price a buyer is willing to pay or how emotionally attached the buyer is to a particular home. The agent’s duty of loyalty requires them to keep all financial and motivational details strictly private unless the client grants explicit, written permission for disclosure.
Prohibited Disclosures Under Fair Housing Laws
Federal law imposes a prohibition on real estate professionals from sharing information that could lead to discriminatory housing practices. The Fair Housing Act prohibits discrimination based on seven protected classes: race, color, national origin, religion, sex, familial status, and disability. A realtor is legally prohibited from discussing the demographics of a neighborhood because doing so risks a violation known as “steering.”
Steering occurs when an agent guides a client toward or away from a community based on the protected characteristics of its residents. For example, an agent cannot answer a question about the racial makeup of a school district or comment on whether a neighborhood is “safe” or “family-friendly,” as such statements can be interpreted as discriminatory signals. The agent’s role is to provide objective data about property features and refer the client to public sources for community information.
This legal constraint also extends to information related to a protected class, even if it is publicly available. Agents are generally prohibited from conducting or commenting on sex offender registry searches, as this information is not considered a material fact about the property’s physical condition. In most jurisdictions, the agent must instead provide the buyer with a written notice advising them of the registry’s existence and directing them to the public source for independent research.
Non-Material Facts and Stigmatized Property History
A significant area of restriction involves facts that do not physically affect the structure of the home but may influence a buyer’s emotional or psychological decision. These are known as “non-material facts” or “stigmas,” and realtors are often not required, and sometimes expressly prohibited, from disclosing them. Stigmatized properties include those where a serious crime, suicide, or death has occurred, or a home alleged to be haunted.
Most states do not consider a death on the property, regardless of the cause, to be a material defect requiring automatic disclosure. An exception exists in some states, such as California, where a death that occurred within the last three years must be disclosed on the property transfer form. If the death occurred more than three years ago, the agent is relieved of the mandatory disclosure obligation, though they still cannot lie if the buyer asks directly.
Real estate professionals are also legally prohibited from disclosing if a previous occupant had a disease such as Human Immunodeficiency Virus (HIV) or Acquired Immunodeficiency Syndrome (AIDS). Federal and state laws classify HIV/AIDS as a disability and, therefore, a protected class under Fair Housing regulations. Disclosing this health status is considered a discriminatory act because the illness has no physical impact on the property itself. Claims of paranormal activity or a “haunted” status are universally considered non-material facts, and an agent is not required to volunteer this information.
Information Beyond Professional Expertise
A realtor’s license authorizes them to perform specific tasks related to the transfer of real property, but it does not permit them to practice in other regulated professions. Agents are strictly prohibited from offering advice or opinions that fall outside the scope of their licensed expertise, primarily to protect both the client and themselves from liability. When a question requires specialized knowledge, the agent must defer to the appropriate licensed professional.
The unauthorized practice of law (UPL) is a frequent restriction, meaning a realtor cannot interpret the legal effect of a contract clause, advise on title issues, or counsel a client on how to resolve a boundary dispute. While an agent can fill in blanks on pre-approved, standardized contract forms, they cannot draft custom legal language or recommend whether a client should sue to enforce a contract. Such actions necessitate consultation with a licensed attorney.
Similarly, a realtor cannot provide definitive opinions on the structural integrity of a foundation, the presence of environmental hazards like mold or asbestos, or the long-term implications of a tax assessment. These technical matters require the expertise of licensed structural engineers, environmental specialists, or certified public accountants. The agent’s role is to facilitate the transaction by recommending that the client obtain the necessary inspections and professional advice.
Clarifying “Cannot Tell You” Versus “Need Not Disclose”
The distinction between information a realtor “cannot tell you” and information they “need not disclose” is an important legal point. When an agent cannot tell you something, a legal or ethical prohibition prevents the disclosure entirely. This category includes confidential client details and information tied to protected classes under the Fair Housing Act, such as a previous occupant’s health status. Revealing this information is a violation of law or fiduciary duty.
Conversely, information an agent “need not disclose” means they have no affirmative duty to volunteer the information, but they cannot actively misrepresent the facts if directly asked. This typically applies to non-material facts or stigmas, such as a death that occurred outside of a mandatory disclosure window. If a buyer asks a direct, specific question, the agent must provide an honest answer or state that they are not authorized by their client to respond.
What to Do When a Realtor Cannot Answer
When a real estate professional cannot answer a question, the responsibility for obtaining that information shifts to the prospective buyer as part of their due diligence. Buyers are empowered to seek out the restricted information using publicly available resources and licensed specialists. This independent research is the most reliable way to obtain information that a realtor is legally prohibited from providing.
To research neighborhood conditions, buyers should consult official government sources and conduct independent searches. Buyers should also hire independent, licensed professionals to generate objective reports the realtor cannot provide. Resources for independent research include:
- Official government sources, such as the state’s sex offender registry and local police crime statistics.
- Municipal planning or zoning offices for community information.
- Online searches of the property address for public records of non-material facts.
- Licensed structural engineers for foundation concerns.
- Environmental inspectors for mold and air quality testing.