#1 Way Real Estate Agents Get Sued

By
Real Estate Agent with Buyer's Edge Company Inc

Real Estate Agents are required to take continuing education classes to keep their licenses active. 

real estate agent

 Photo by Tyler Nix on Unsplash

At the Greater Capital Area Association of Realtors otherwise known as GCAAR, we have an ethics instructor who is a lawyer. He's acted as general legal counsel for the Maryland Association of Realtors since 1984. 

 

The stories he shares come from real life experiences and they are scary! 

 

 

  • The #1 way real estate agents get into trouble is failing to disclose material facts. If the seller chooses to disclaim instead of disclose, they still need to disclose a latent defect.  (that's a fault with the property that couldn't be discovered by a thorough inspection prior to the sale.) 
  • Listing agents and buyer agents need to be careful how they describe a property. Is the house really in excellent condition? Is the roof/HVAC new? Has the kitchen been updated? These vague descriptions have been the subject of lawsuits filed against real estate agents. Provide dates instead of saying something is "new or updated". And don't say "excellent condition" in a description unless it's 100% true. Here's an example: A house listed as "in excellent condition" was purchased by a buyer. The buyer had a home inspection and several items, one major, were discovered by the inspector. The buyer said, "How can this home be excellent with all these repair items?" So the buyer asked the listing agent to reimburse him for the cost of the home inspection. The listing agent said no. Many months and thousands of dollars later, the buyer won a lawsuit! All because the listing agent wrote "excellent condition" as a description of the property. 
  • Your real estate agent will never say which neighborhood is right for you. Certain details of a neighborhood could violate the Fair Housing Act which was enacted in 1968 to eliminate housing discrimination. A real estate agent can and will provide a home buyer with tools and resources so they can make an informed decision regarding neighborhoods. 
  • Real estate agents should be careful to present a true (honest) picture when advertising. Apparently, this is another common issue when agents get into trouble. All advertisements should disclose the Broker's name and/or company name with the office telephone number. In other words, it should take no longer than 15 seconds for someone to know an agents Brokerage. This includes all correspondence, anything that's mailed, business cards and newsletters. 

 

Continuing education classes give us the opportunity to check ourselves. Are we acting ethically every day with every client? Are we staying in the scope of our expertise? Are we acting solely in the best interest of our client/principal? 

Posted by


4849 Rugby Avenue Bethesda Maryland 20814 office 301.657.1475 cell 301.922.1677

 

Victoria Henderson is Vice President & Associate Broker with Buyer's Edge, Exclusive Buyer Agent & Realtor in Virginia, Maryland and Washington DC. Victoria is a certified Military Relocation Professional 

 

 

Marshall Henderson is a Certified Negotiation Expert & Exclusive Buyer Agent with Buyer's Edge & Realtor in Virginia, Maryland and Washington DC

Certified Negotiation Expert

 

Members of National Association of Exclusive Buyer Agents

Not Just a Buyer's Agent, an Exclusive Buyer's Agent. There's a Difference. Learn more at: 

 HomesBuyHendersons.com & BuyersAgent.com

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Rainmaker
1,657,123
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

This is a very well written and informative post Victoria Ray Henderson Marshall Henderson , thank you for publishing it.

Apr 02, 2018 05:39 PM #1
Rainmaker
297,906
Victoria Ray Henderson
Buyer's Edge Company Inc - Bethesda, MD
Real Estate for Home Buyers with Buyer's Edge

Thank you Bob "RealMan" Timm for reading our blog.Have a great week!

Apr 02, 2018 06:34 PM #2
Ambassador
4,067,199
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Victoria and Marshall

This should be read by all agents, but especially new ones. Great guidance in this post. I think many underestimate the importance of disclosures, and the potential liability for not, to them and to their clients.

Jeff

Apr 02, 2018 06:57 PM #3
Rainmaker
1,107,138
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

Good day Victoria Ray Henderson Marshall Henderson 

Thank you for sharing your information with us

Have a great day.

Apr 02, 2018 07:08 PM #4
Rainmaker
3,208,187
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Great post, Victoria. I'm always astounded by agents who call roofs and mechanicals that are more than a couple of years old "new." They could be consider "newer," but unless they've been put in that year, they are not "new." I also simply refer to dates for things like this.... then there is no question about what you are disclosing.

Apr 03, 2018 04:12 AM #5
Rainmaker
297,906
Victoria Ray Henderson
Buyer's Edge Company Inc - Bethesda, MD
Real Estate for Home Buyers with Buyer's Edge

Thank you Jeff Dowler that is my hope. We all need to understand these ethical rules to help our buyers & sellers and to keep ourselves in check. 

Apr 03, 2018 04:56 AM #6
Rainmaker
297,906
Victoria Ray Henderson
Buyer's Edge Company Inc - Bethesda, MD
Real Estate for Home Buyers with Buyer's Edge

Thank you Nina Hollander I see "Excellent condition" in the description of a house about 5 times a day! Thanks for reading the blog and have a great day!

Apr 03, 2018 04:57 AM #7
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Victoria Ray Henderson

Real Estate for Home Buyers with Buyer's Edge
Looking for Buyer Agents in Maryland, Virginia or Washington DC
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