The Ethics of No

When I tell a client not to buy

The decision comes from the paperwork. After your offer is accepted, you enter the contingency period, a window written into the contract that lets you investigate the property and back out if what you find changes the picture. During that window, a series of reports arrives. The main ones: the home inspection, the pest report (a termite and wood-destroying organism inspection), the seller's disclosures (their written record of every known issue with the property), the HOA (homeowners association) documents, the title report (which confirms legal ownership and any claims against the property), and the natural hazard report (which maps earthquake, flood, and fire risk for the property).

I read all of it. I am not an inspector, an engineer, a contractor, an attorney, a tax professional, or an environmental specialist, and I do not diagnose structural problems or render legal opinions. What I do is review the reports, identify what looks like risk, and walk you through the findings so you understand what you are agreeing to before you remove your contingencies (give up the right to cancel for that specific reason) and commit to the purchase.

Sometimes the risk is manageable, and the right move is to negotiate a credit or a repair. Sometimes the reports reveal something that changes the math entirely. When that happens, I tell you.

Who reads your documents

I do. That is the job, and it is not delegated. The reports, the disclosures, the HOA package, the contract language and its deadlines: I read them and I tell you what I see. Before I advise a client to cancel, I check that the contract's contingencies and deadlines actually support it, and when the question is a legal one rather than a practical one, I say so and point you to an attorney. Walking away from a signed contract is a decision that has to hold up.

My brokerage, Centermac Realty, is led by a broker-of-record (the person California holds responsible for supervising the brokerage's transactions) who is also an attorney licensed in California, Kenny Kean Tan. He is an escalation path, not a routine step: across more than a hundred transactions I have gone to him six times, when a genuine legal question came up or a letter needed drafting. I am telling you how often it is used so you can weigh it accurately.

To be clear about what that is and is not: Mr. Tan is not your attorney. No attorney-client relationship is created between you and him or with any law practice of his, nothing in that escalation is legal advice to you, and no attorney-client privilege (the legal protection that keeps communications between you and your attorney confidential) applies to it. He does not represent your interests in your transaction. If you ever want to engage him or his firm, that would be a separate matter you arrange directly and in writing with them. Nothing here is a referral, I am not paid for one, and the escalation costs you nothing.

If you want a lawyer of your own, meaning someone who represents you, owes you a duty of loyalty, and whose communications with you are privileged, retain your own real estate attorney. That is a different relationship and I encourage it.

What this costs you

Nothing extra. There is no fee for telling you to walk away, no surcharge for the hours I spend reading reports that lead to a cancelled contract.

Buyer-agent compensation changed in 2024 and again under California law in 2025. Your agent's compensation is now set in a written buyer-representation agreement you sign before your agent shows you homes, which spells out the amount, who is expected to pay it, and the scope of representation. It is negotiated between you and your agent, not set by law, and depending on what that agreement says and how the transaction is structured, some or all of it can be your obligation. Read it before you sign it, and ask about anything in it you do not want.

The cost falls on me. 91 of my 104 documented closings have been on the buyer side. Buyer representation is the core of my practice. When I tell a client not to buy, I lose the commission on the deal I was working toward. I make that call knowing the math.

Any agent can find you a house and write an offer. The value is in someone who reads the fine print, weighs the risk, and tells you what they actually think, including when the honest answer is no.

Frequently asked questions

Would a real estate agent ever tell me not to buy a house?

Some do. The commission structure works against it: an agent is paid when the deal closes. When I represent a buyer, I am paid only if the purchase closes, and I still advise against one when the inspection findings, the disclosures, or the contract terms create risk that is not worth taking. It costs me the deal, but my obligation is to my client.

What happens if the inspection finds something serious after my offer is accepted?

That is what the contingency period is for. If the inspection turns up a significant issue, you have options: negotiate a repair or a credit with the seller, or cancel the contract and get your earnest money (the good-faith deposit you put down with your offer) back. Releasing the deposit requires both parties to sign cancellation instructions, so it is not automatic even when you are within your contingency period. I review the inspection report with you, help you understand what the findings mean for the property, and walk you through the decision. I am not an inspector or a contractor, so I do not diagnose the condition itself; I read the report, flag what concerns me, and tell you when you need a specialist to look further. This is general information, not legal advice; consult a qualified attorney for your situation.

My agent earns a commission only if I buy. How do I know the advice is honest?

You cannot know from a promise. You can know from the structure. Ask any agent you are considering what happens when the reports come back bad. An agent who has a process for advising against a purchase, and who has actually done it, is more likely to give you a straight answer than one who has never walked away from a commission. This page describes my process.

Can I walk away after the disclosures come back bad, and what does it cost me?

If you are still within your contingency period, yes. The most common contingencies are the inspection contingency, the appraisal contingency (which protects you if the property appraises below the purchase price), and the loan contingency (which lets you cancel if your financing falls through). If you cancel within the contingency period for a reason covered by one of those conditions, you are typically entitled to your full earnest money deposit back. Releasing it still requires both parties to sign cancellation instructions, so the return is not automatic. If you cancel after removing your contingencies, and you do not have another basis under the contract or the law to cancel, you may be in breach. That is not an automatic forfeiture of your deposit. Whether the seller can keep your earnest money as damages depends on whether both parties separately signed or initialed a liquidated-damages clause (a provision where both sides agree in advance to a set amount of damages if the buyer defaults). For a one-to-four-unit property the buyer intends to occupy, California treats 3% of the purchase price as the dividing line: at or below it the clause is presumed reasonable, and above it the seller has to prove the amount is reasonable. It is a threshold, not a hard cap, and the standard California purchase agreement is written to the 3% figure. The specifics depend on your contract, and the consequences can be significant. This is general information and not legal advice.

What are the red flags that should stop a Bay Area purchase?

No single list covers every situation, but these come up often: foundation or structural findings in the inspection report, undisclosed or recurring water damage, mold with unclear remediation scope, large pending HOA special assessments (one-time charges the homeowners association levies for major repairs), unresolved title issues, and significant gaps between the listing description and the actual condition of the property. The specifics depend on the house, the reports, and the terms. My role is to read the paperwork, flag what I see, and give you a clear picture of the risk. I am not an inspector, an engineer, a contractor, or an environmental specialist, and none of this is legal advice; where a finding needs a specialist, the right move is to bring one in.

Who reviews the contract in my transaction?

I do. Reading the contract language, the contingency deadlines, and the disclosure responses is my work, not something I hand off. My brokerage is led by a broker-of-record who is also a California-licensed attorney, and I can escalate to him when a genuine legal question arises, which across more than a hundred transactions has happened six times. That escalation is not legal services for you: he is not your attorney, no attorney-client relationship or privilege is created, and none of it is legal advice to you. If you want legal representation, retain your own real estate attorney. This is general information about my practice, not legal advice.

What does it mean if a brokerage's broker-of-record is also an attorney?

It means the person California holds responsible for supervising that brokerage's transactions also holds a law license. In my practice it means I have somewhere informed to turn when a question is genuinely legal rather than practical, which is uncommon but does happen. It is supervision and escalation, not legal representation: it creates no attorney-client relationship, no privilege, and no legal advice to you, and it does not replace your own attorney. Brokerages supervise competently in a number of different ways. This is how mine is set up. This is general information, not legal advice.

Do I still need my own real estate attorney?

If you want legal representation, yes. I review your documents as your agent, and my broker's role is supervision of the brokerage, not representation of you. It is not attorney-client representation, does not create privilege with him or with any law practice of his, and does not replace independent legal counsel. Your own real estate attorney works for you, represents your interests, and communicates with you under attorney-client privilege (meaning those conversations are legally protected and confidential). I recommend that any buyer who wants legal counsel retain their own attorney. The two relationships serve different purposes. This is general information; consult a licensed attorney for advice specific to your transaction.

Read next

• All frequently asked questions
• How to read California real-estate disclosures
• Home inspection red flags for Bay Area buyers
• Which contingencies to keep or waive