How Agents get sued by an Expert Witness

By
Education & Training with Real Estate Expert Witness Support

If you read my bio,  you know that in addition to being an agent,  I also am a frequent expert witness in litigation when agents are sued.  First,  there are typically several experts hired since each side is trying to find out if their guy (or gal) made mistakes ...as well as seeing if they could divert some of the blame to another party.  It is common that the Selller,  the Buyer,  the Seller's Broker and the Buyer's Broker all have experts.  And,  if you add in Title or inspectors,  it is not uncommon to have 7 or 8 attorneys on a real estate case.  No wonder the costs are so high.

So,  what do agents get sued for?  Most lawsuits are what we call "bad house" cases.  This means that the buyer buys the house and finds problems after it is closed.  Most often it is condition related,  so they start looking for what was and wan't disclosed by the seller and inspectors.  Next,  we try to see if they included any what are called "red flags",  meaning those things that should have been noticed that might lead to a bigger problem.  Many of these issues are not that obvious, much like the tip of an iceberg. 

This is where the agents get into trouble. If it wasn't disclosed or under disclosed,  the seller will typically claim that the listing agents should have given them better advice. If it was disclosed,  the buyer will claim that the agent told them it wasn't a big deal or failed to warn them about the potential big problem which hides behind the little one.  You know the kind I mean,  like the water stain in the ceiling that the seller claims was from a "prior" roof leak that has since been fixed.  Or,  a seller disclosing that an upgrade was permitted,   only to find out that ....yes,  they got a permit beforethework started but the contractor never got a final inspection from the city. 

Or one I saw recently,  a buyer bought a house with a shared driveway.  Their agent failed to point out the possible problems with this situation.  As it turned out,  their house was in the back.  The front neighbor,  who was a little whacky,  would park her car in the driveway,  thus blocking the buyer from getting to their house.  There was also no road maintenance agreement,  so when something had to be done,  there was no writing to control it,  and the buyer had to fight with his whacky and never rational neighbor.  When the buyer finally got fed up enoght to seek legal advice,  the attorney told the buyer that their agent should have spotted the fact that there was not road agreement and at least alerted them to the posslble downsides of a shared driveway. 

All of this leads to the same road ...... did the agent meet their fiduciary duty to their client.  Did they treat the clent as if they were buying the house themselves.  Did they warn them about possible risks and give them advice on where to find out the answer.  Too often, the answer is NO>

Remember,  they don't hire us to show them houses.  Our expertise as agents is to problem solve.  If you look back on my prior posts,  I have an extensive post on the three steip process of (1)  Issue spotting  (2)  Discussing ramificaitions and (3) giving property advice.  It is a good read

P.S.  For those of you who wonder,  what do other agents think of me and other expert witness. One,  I turn down about 20% of the calls I get from attorneys......meaning,  I can't support their position,  whether it is for or against the agent.  Sometimes I am in support of the agent but probably 75% of the time,  I am opposed.  I guess the question I would have for those agents who question my motives ..........Do you know any bad agents?  If you do,  should we ignore them when they harm the public?  This business will never improve until WE,  start enforcing our own standards.  Making quality as important as quanitity in real estate offices.  And,  when needed, file a Grievance to make sure an agent doesn't do it again

Guy Berry

Keller Williams Gateway, San Jose

Expert Witness

 

 

 

 

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Comments (8)

Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

Interesting post . In this miserable market maybe I should switch gears and hire myself out as a witness. Nice post and I will read your other ones for sure

Oct 11, 2008 11:20 AM
Sean Allen
International Financing Solutions - Fort Myers, FL
International Financing Solutions

HHHmmmm Guy ...... I bet other real estate agents see you in a 'love / hate' type of atmosphere. They will either enjoy working with you or hate you for being an "expert witness". I guess it would go with the territory.

Interesting blog and very beneficial.

Sean Allen

Oct 11, 2008 11:31 AM
Guy Berry
Real Estate Expert Witness Support - San Jose, CA
Real Estate Broker and Legal Expert

Sean,  I have added a PS to the post to answer your question

Oct 11, 2008 12:12 PM
Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information

Howdy Guy

I have been an Expert Witness, in cases for an against Home Inspectors. Just like you I have also tured down calls from attorneys.

You did a very fine job writing this post.

God Bless America

Oct 11, 2008 02:21 PM
Konnie Mac McCarthy
MacNificent Properties, LLC - Cobb Island, MD
Broker/Owner - VA & MD "Time To Get A Move On!"

I am not sure how an agent can get sued for a bad house, when it is the sellers responsibility to disclose.....I always ask my clients about any issues with a house and supply them with the proper disclosures.....that is a seller issue, we can only disclose what we know or reasonable should have known....

Oct 11, 2008 02:24 PM
Guy Berry
Real Estate Expert Witness Support - San Jose, CA
Real Estate Broker and Legal Expert

Connie,  you seemed to have missed the point of my post.  The agent can not walk around with their eyes closed.  If there is something (tip of the iceberg) in the inspections,  seller disclosures or the agents reasonable observation,  then they have a duty to make sure the buyer sees it and understands the risk.  This is like agents sending copies of inspections or the prelim to the buyer and if the buyer doesn't ask questions,  then the agent thinks they are off the hook.

 

Oct 11, 2008 02:29 PM
Mary Pope-Handy
Sereno Group Real Estate - Los Gatos, CA
CRS, CIPS, ABR, SRES, Silicon Valley

The law is different from state to state, but in California, the idea is what the agents know or should have known should be disclosed. That is a high standard. We are supposed to look for the red flags, point them out to our clients, and then explain why they are a potential problem.

Oct 11, 2008 03:37 PM
Laurie Mindnich
Centennial, CO

Guy, is this an agency disclosure issue (to whom the fiduciary is owed) as much as it is a non disclosure of material defects? It sounds like it's boiling down to the responsibility of the agent, as opposed to the perceived hindsight defects. I agree with you that it's up to the selling agent to perform due diligence, but what if both agents (as is, pathetically, not uncommon in my area) represent the seller?

Oct 12, 2008 02:30 AM