Certified Relocation Professional (CRP) Practice Exam

Disclosure requirements in the sale of residential real estate are subject to what?

1. A national standard set by the consumer protection agency

2. The uniform commercial code

3. State and local laws

4. The consumer statute recently enacted by the US Congress

The correct answer is: State and local laws

Disclosure requirements in the sale of residential real estate are primarily governed by state and local laws. Each state has its own regulations and statutes that dictate what information must be disclosed to potential buyers, including details about the condition of the property, known issues, and any other material facts that could affect a buyer's decision. This state-centric approach allows for regulations to cater to the specific needs, market conditions, and practices of local real estate markets. While there are overarching federal laws that may intersect with real estate transactions, such as the Truth in Lending Act or Fair Housing Act, the specific mechanisms and requirements for disclosure are largely managed at state and local levels. Consequently, this ensures that the regulations may vary significantly based on geographic location, as each state may prioritize different aspects of what needs to be communicated to buyers. This tailored approach can provide greater relevance to the local real estate context, as opposed to a one-size-fits-all national standard or a general commercial code that doesn't specifically address residential property transactions.