Q: I recently had a listing under contract that was terminated because a VA appraisal was several thousand dollars under the contract price. I now have two new offers to present to my client, both of which are also VA financing. Am I required to disclose to the new offerors the value of the prior appraisal?
A: No. Virginia Code section 54.1-2131 requires that you “treat all prospective buyers honestly” and to “not knowingly give them false information.” Additionally, a licensee working for a seller is required to “disclose to prospective buyers all material adverse facts pertaining to the physical condition of the property which are actually known by the licensee.” A prior appraisal value does not necessarily pertain to the physical condition of the property. However, if the prior appraisal was lower than the previous contract price because of a material adverse fact pertaining to the physical condition of the property, you would need to disclose that condition.
What is the Legal Hotline?
The Legal Hotline is a member benefit that has been supporting members for over 25 years. Our team of lawyers answers your important questions about real estate transactions quickly and accurately (usually within three business hours!).