6 Ways to Ensure You're Sued for Misrepresentation

March 1, 2007

Want to put your foot in it and end up with a big legal bill? Here’s how:

  1. Tell the seller that since the buyer probably won’t notice a problem, it’s OK to not mention it. Hint: Always tell the purchaser about all material defects.
  2. Repeat “something you heard” about a possible hazardous waste dump in the neighborhood while standing in line at the grocery store. Hint: Don’t make statements you can’t verify. Make some effort to confirm the accuracy of what you’ve heard. If you can’t confirm that it’s false, make the buyers aware of the information and let them investigate it themselves.
  3. Take the sellers’ word that they’ve never had water damage, despite those suspicious lines on the foundation. Hint: Caution the clients about the need to be candid in their disclosures. If they insist on saying there hasn’t been any damage, you can withdraw from the representation or make sure all buyers are aware of the foundation markings so that they can conduct their own investigation.
  4. Assume you’ll remember exactly what you told the buyers about the property, even six months later when they dispute what you said. Hint: Document all information you share with the buyers.
  5. Pooh-pooh the buyers’ idea of getting a home inspection before closing, since the house is obviously in great shape. Hint: Always encourage buyers to get any inspections they want.
  6. Don’t worry too much if you don’t know anything about real estate construction or planned new developments in your local market; after all, your job is sales. Hint: Be informed on current matters in your market, including red flags indicating property defects.