Final answer:
Real property reports are essential for buyers to make informed decisions as they provide key information about the property, such as land dimensions and potential issues that can affect the value. Imperfect information can create difficulties in agreeing on a price due to uncertainties regarding the property's characteristics and value.
Step-by-step explanation:
True, real property reports are necessary for buyers to make informed decisions. These reports provide critical information regarding the property, such as accurate land dimensions, the location of buildings on the property, and any easements or encroachments that may affect the use of the property. Without a real property report, there could be imperfect information, leading to difficulties in agreeing on a price. For instance, a buyer may not be aware of a landfill next door or a factory across the street, which could significantly affect the property's value. Similarly, when selling land like a farm, an accurate property title and determination of acreage are essential to ensure a fair transaction.
Imperfect information leads to difficulties in pricing because neither the buyer nor the seller may understand the full extent of what is being bought or sold. Without complete and accurate information, it is challenging to determine a fair market value, which is crucial for both parties to agree on a price. This is why complete and transparent disclosures and reports are crucial in real estate transactions.