3 Things That Often Results in a Real Estate Agent Getting Sued

We live in a very litigious society. People today are less forgiving than they used to be. There is also the opportunity to be financially compensated handsomely when people feel like they have been wronged.

For a real estate agent it means they have to be very careful about what they represent when selling real estate. One slip of the tongue and someone could be suing you.

There happens to be a few topics that often get real estate agents in hot water. Unfortunately, too many agents volunteer information or do things they shouldn’t. Doing this to the wrong person leads to finding yourself in court.

Let’s look at three common topics in real estate that cause lawsuits to be filed against real estate agents.

Representing the Location of a Home’s Boundary Lines

One of the golden rules in real estate is to never point out a property line to a home buyer. When a seller tells a real estate agent where their homes property lines are located, they should make a mental note of them and that’s it.

How to find property lines should be left to professionals. The only way you can know precisely where a property line is located is by hiring a professional land surveyor. A property surveyor will visit the home and professional survey using their professional expertise.

Homeowners often will receive what is called a mortgage plot plan when getting a loan through a lending institution. The mortgage plot plan will provide rough locations of house boundary lines. The house and any other structures will also have locations within the four corners of the lot.

It is a good idea to provide a plot plan to potential home buyers when available. A real estate agent can leave the plot plan with their marketing material that a buyer can take.

When a buyer asks where the property lines are located, they should refer a buyer to look at the banks plot plan. By standing with a buyer and pointing out where you “feel the lines are located” is just opening up the possibility of a lawsuit.

Real Estate Agents should never do this!

Misrepresenting The Square Footage of The Home and Bedroom Counts

One of the key elements to any real estate listing is the size of the home. Many home buyers will make the basis for their home buying decision based on a home’s size. When this information is wrong it can lead to the listing agent being sued.

There are also times when incorrect bedroom counts can lead to lawsuits as well. In both circumstances a buyer will feel like they have been wronged if the information is not correct.

In the case of a home’s square footage, there will be a place in the multiple listing service for a real estate agent to enter an amount. If a real estate agent is lazy they will often just put a figure that the homeowner tells them to.

The problem with doing that is it is often incorrect. Telling a buyer a home is 4000 square feet when it is only 3700 is a significant mistake. Buyers can sue the listing agent after the fact for blatant misrepresentation of property size.

Misrepresenting bedrooms is just as common. You might be wondering how in the world could an agent misrepresent the number of bedrooms. Isn’t it plainly obvious how many bedrooms a property has?

Yes, you can surely see how many physical bedrooms are in a home. Here is the problem – if a home is serviced by a septic system, it will be “rated” for a specific number of bedrooms. So, if a home has a 3 bedroom septic system, it can only be marketed as a 3 bedroom home, even if there are 4 bedrooms present.

Real Estate agents make this mistake all the time. It happens quite often when a real estate agent is accustomed to selling homes in areas where there is public sewer.

If they take a listing in an area outside their normal place they do business and it has a septic system, misrepresentation can occur.

Buyers who research this after their purchase feel duped. They know it is an issue and will think about the fact when it comes time to sell, they will need to call their 4 bedroom purchase a 3 bedroom.

Some buyers who find this out will often say they never would have purchased the property. The amount of bedrooms is one of the crucial factors when buying a home.

Practicing Dual Agency

One of the more heavily litigated topics in real estate is single agent dual agency. Single agent dual agency is when one real estate agent works with both the buyer and the seller in the same transaction.

The problem with dual agency is consumers get no benefits from it. All the benefits go to the real estate agent. Dual agency presents a conflict of interest for a real estate agent.

While they are “working” for both the buyer and seller they cannot provide the same services if they were a respective buyer’s or seller’s agent.

In single agent dual agency, a real estate agent is not allowed to give either party advice. Doing so would be in conflict with the other party.

For example, if a buyer wants guidance on what to pay the home, the agent is not allowed to suggest anything by law. They must remain a neutral party.

When one party feels like they are not being treated fairly it can easily lead to a lawsuit being filed. Agents get into trouble by providing advice to both parties which is illegal.

Final Thoughts

Real Estate agents always need to be vigilant about doing the “right thing.” When unsure about something it always makes sense to speak to the broker or in some circumstances a qualified real estate attorney.

It is far too easy today to end up in a lawsuit when you’re not paying attention. An agent should stay up to date on current laws and get their required continuing education.

The best real estate agents are those who are highly educated and always put their client’s interests first.

About the author: The above article on “3 Things That Often Results in a Real Estate Agent Getting Sued” was written by Bill Gassett. Bill has been working in the real estate industry for the past thirty-three years. He works for RE/MAX Executive Realty in Hopkinton Massachusetts. Bill loves providing trustworthy information to buyers, sellers, and fellow real estate agents to make the best possible decisions. His writing has been featured on RIS Media, National Association of Realtors, Inman News, Placester, Today.com, Credit Sesame, and others.

About Rochester’s Real Estate Blog: Rochester’s Real Estate Blog is owned and operated by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.

Since being launched in 2013, Kyle has published more than 150 quality, in-depth, and unique real estate related articles on the Rochester Real Estate Blog pertaining to topics varying from home selling to mortgages and everything in between!  In addition to quality real estate related content, there are also many quality articles pertaining to the Greater Rochester NY area.

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