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Real estate glossaryNational exam concept

Material fact

A material fact is information a reasonable party would consider important when deciding whether or on what terms to enter a real estate transaction.

Exam area: Property Disclosures

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What does “material fact” mean in real estate?

A material fact is information a reasonable party would consider important when deciding whether or on what terms to enter a real estate transaction.

How is “material fact” different from the closest wrong answer?

Material describes importance to the decision. A material defect is a physical or legal problem, while an adverse material fact is material information that is unfavorable to a party's interests.

What is the Georgia-specific rule?

Georgia duties depend on the relationship and the statute, but a licensee must not knowingly give false information and may have duties to disclose actually known adverse material facts.

Worked exam example

Scenario

A pending condemnation affecting the parcel could change a buyer's decision and is therefore material even though the building itself is sound.

What is the most common exam trap?

Trap correction

A fact need not make the property unusable to be material. The test is significance to a reasonable transaction decision.

Original exam check

Apply the definition

A house is structurally sound, but the county has filed to take the front 30 feet of the lot for a road widening. Is the pending taking a material fact for a buyer?

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Related terms to learn next

Material defect

A material defect is a problem with the property or its improvements that would significantly affect value, safety, intended use, or a reasonable buyer's decision.

Adverse material fact

An adverse material fact is significant information that is unfavorable to a party's interests, such as an actually known condition materially affecting the physical condition of the property or its immediate neighborhood, as described by Georgia law.

Latent defect

A latent defect is a property defect that is hidden or not readily discoverable through a reasonable ordinary observation or inspection of the type described in the question.

Patent defect

A patent defect is a property defect that is open, observable, or discoverable through the reasonable level of observation or inspection described in the transaction.

Recommended next complete lesson

Continue with Property Disclosures complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.
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