Definition - What does Material Fact mean?
A material fact is a specific incident, circumstance or occurrence that plays a pivotal role in a decision-making process. As such, it is usually the single most important factor in a financial, business or real estate deal. Someone who is aware of a material fact would make a different decision to someone who is unaware of it.
Justipedia explains Material Fact
In real estate, material facts are those that directly affect the choices made by buyers and sellers. For example, a prospective buyer who knows that a house was badly damaged in a past earthquake or flood would likely offer less for the home than the seller is asking, or abandon negotiations with the seller altogether. On the other hand, the same person would likely purchase the home if they were unaware of the past damage.
A seller who knows the asking or final sale prices for similar homes in their neighborhood can set a realistic asking price for their own home. Conversely, the same seller who is not privy to this information would be less likely to put their home on the market at a competitive price.
As a result, real estate agents throughout the United States are legally required to share material facts with their clients.
The law also mandates that car dealers share material facts pertaining to any vehicle that a customer is considering. This is important because a customer who has the information may make a different decision regarding the purchase to someone who is uninformed.