law
material fact
A material fact is any information that a reasonable buyer or seller would consider important in deciding whether to enter a transaction or on what terms. Examples include structural defects, water intrusion, title problems, zoning violations, and environmental hazards. Licensees generally must disclose known material facts about the property's physical condition to all parties. What counts as material, especially for stigmatized property, varies by state.
- Exam tip
- Licensees must disclose material defects even to customers they do not represent; failing to do so can be misrepresentation. Stigmas like a prior death are often treated differently by state law.
- Example
- A listing agent knows the basement floods every spring. That is a material fact that must be disclosed to prospective buyers.
Related terms & state variants
Sources
Source verification pending. Confirm current requirements with your state regulator.
Last verified: 2026-10-23