Is it wise for buyer's agents to rely on representations made by the seller or listing agent? Is it smart for a listing agent to rely on statements made by their seller, or copy information from an expired listing, or similar property in a subdivision? If in doubt, don't.
A very seasoned agent in our office recently listed a property for sale in a retirement community. The elderly woman said her monthly HOA fee was $175 monthly. This was written in the MLS remarks. The property sold for cash and closed within one week. The buyer was not a ‘happy camper' when they realized after closing that the HOA fee was actually $225 per month.
The buyer's agent pointed their finger to the listing agent. The buyer asked for $3,500 as compensation after filing a complaint with the board of Realtors and the real estate department against the listing agent. Apparently the buyer missed the info on the CC&R/HOA disclosure and the seller forgot to include this detail on the seller disclosure forms.
In fairy tales everybody lives happily ever after. In real estate tales mistakes are monetized and buyers file complaints, retain attorneys, and seek compensation through arbitration. The best way to win lawsuits is to avoid them and verify data if it may be used by a plaintiff in the future.
Another experienced real estate friend of mine listed a townhome for sale. He looked at similar MLS entries to determine the units were approved for FHA financing. The buyer relied on his representations. Imagine the buyer's dismay when in escrow the lender stated that the property no longer qualified for FHA financing.
In a perfect world the buyer would have said, "To err is human, to forgive divine". This buyer was different. The attorney monetized the additional down payment and slightly higher interest due to missing the loan lock and asked the listing agent for $15,000. Fortunately, my friend had a $2,500 E&O deductible to absorb the ruling.
The early bird gets the worm. The lazy bird gets a commisionectomy. The copy cat learns expensive lessons the hard way.
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