Facing high interest rates and an elevated cost of living, New Hampshire is beginning to see a resurgence of foreclosures and short sales across the housing market, according to NHAR legal counsel Matt Johnson.
In a recent risk management update, Johnson advised Realtors to navigate distressed property transactions with caution, emphasizing statutory compliance, fiduciary confidentiality, and critical disclosure boundaries.
Johnson reminded agents that New Hampshire maintains specific statutes regulating foreclosure consultants, and that clients approached by third-party foreclosure workout specialists should be urged to seek legal representation to ensure their rights remain protected.
For listing agents handling distressed homes, Johnson highlighted the continuing duty of confidentiality owed to sellers, pointing out that agents generally must keep a seller’s financial hardship and private negotiations confidential. While state courts have not ruled definitively on every scenario, Johnson stated his legal opinion that listing agents are not required to disclose that a seller is in pre-foreclosure talks or subject to an auction notice — provided the scheduled foreclosure date is far enough in the future that the sale can close without lender interference.
That duty shifts immediately when circumstances threaten the viability of a deal. Johnson stressed that if a scheduled foreclosure auction precedes the proposed closing date, the buyer must be notified promptly.
Similarly, full disclosure is required the moment a transaction becomes a short sale — occurring whenever the sale price falls short of existing liens and necessitates lender approval. Because both scenarios introduce substantial closing risks, they represent material conditions that must be shared with buyers and their agents.
Johnson urged real estate professionals to maintain close communication with clients, monitor changing financial factors, and adjust disclosure practices promptly as transactions evolve.
