Watch for these Complaint Triggers

By
Education & Training with REAZO

real estate pipeline, complaints, real estate agents, consumers, clientsHERE AT Real Estate Pipeline, complaints are taken very seriously. On occasion, we handle complaints from agents about a particular lead we have forwarded them. Other times, referrals contact us with complaints about the agent we connected them with.

Complaints not properly addressed can lead to formal action being taken by state regulators or negative reviews being posted on consumer sites.  

It seems that much of the time, complaints are similar, oftentimes caused by the same set of circumstances.

How about you?

As a real estate agent, do you know what actions most commonly lead to complaints in the first place? Do you have procedures in place to avoid complaints and to address them professionally when they do arise?

Following are some of the most common complaints registered against real estate agents in North Carolina. The list was posted by the North Carolina Real Estate Commission and while the list is specific to that state, I suspect it would be similar for agents in every state:

  1. Misrepresenting material facts. Your client needs information to make an informed decision and claims that information is incorrect is among the most common complaint lodged against an agent.
  2. Mishandling trust accounts. While duties within an agency can be delegated, the broker in charge - not a bookkeeper or others - has ultimate responsibility for ensuring trust accounts are managed properly.
  3. Disputed earnest money accounts. Many of these complaints stem from money being paid out of an account without written agreement on how that money should be distributed.
  4. Drafting legal papers. Remember you are a real estate professional, not an attorney. An agent can help a client fill out existing paperwork, but if complex language needs to be added to a legal document, always hire an attorney to prepare that paperwork.
  5. Dispute over contract acceptance. Legally, all accepted transactions involving property needs to be through written, never oral, agreements. Remember, an oral agreement is not a binding contract.
  6. Loan fraud. Don't help a client with a down payment or help someone with expenses.
  7. Conflict of interest. If you act in the interest of one party, you cannot represent another party without their knowledge of your earlier obligations.
  8. Discrimination. The Fair Housing Act prohibits discriminating on the basis of race, religion, sex or a variety of other factors.
  9. Records Violations. Keep good records and keep them for longer than is required by your state's law. Complaints can be filed even after your obligation to keep records has lapsed.
  10. Lack of communication. Keep clients informed, return their phone calls, never leave them in the dark.

Be aware that many complaints are caused by one of the above circumstances. Whenever you find yourself working in one of the above areas, tread carefully and be aware they can be a source of issues if not addressed to the clients' satisfaction.

 When a complaint does come around, here is some advice on how to deal with it.

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Comments (2)

Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Grant - Not too long ago, the Colorado Real Estate Commission released a similar list, and it had pretty much the same items, with a bit different order. Most of those are symptoms of bad real estate practice, and are seen much more often than they ought to be.

Mar 27, 2012 02:48 AM
Angela Lyons
REAZO - Missoula, MT
Reazo.com for home buyers and sellers.

Dick,

Thanks for posting. Yeah, I suspect the majority of items on my list trip up agents regardless of the state they are in. You're right, they are symptoms of bad real estate practice and actually pretty easy to avoid.

Mar 27, 2012 02:56 AM

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