Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

Which of the following best describes 'material facts' within real estate transactions?

1. Facts that could affect the decision-making of a buyer or seller

2. Facts that are irrelevant to the transaction

3. Personal opinions about a property

4. Unverified claims about property value

The correct answer is: Facts that could affect the decision-making of a buyer or seller

Material facts in real estate transactions refer to information that could significantly influence the decisions of buyers or sellers. These facts typically include essential details about the property, its condition, legal issues, or other aspects that may impact the transaction's outcome. For example, information about structural defects, zoning issues, or the property's history of flooding are all considered material because they can directly affect a buyer's willingness to purchase or a seller's ability to sell at a desired price. In contrast, irrelevant facts do not have an impact on the transaction or decision-making process, while personal opinions are subjective and do not constitute objective information about the property's condition or legal considerations. Unverified claims about property value also lack the substantiation necessary to qualify as material facts, as they might not be grounded in reality or might mislead parties involved in the transaction. Thus, recognizing and disclosing material facts is crucial for transparency and ethical dealings in real estate.