As a writer-producer for the National Association of REALTORS® based in Washington, Sam Silverstein develops articles and videos for NAR's members and others interested in its activities, statistics and research. You can contact him at SSilverstein@realtors.org.
4 Behaviors That Could Get You Sued
Staying out of legal trouble means knowing what you need to say—and when to say nothing at all.
July 13, 2016
Neglecting to disclose material information.
The old saying that honesty is the best policy holds especially true when it comes to real estate. Be sure to let prospective buyers know key facts about a listing up front—even if they may cause some people to hesitate before making an offer—instead of waiting until later in the sales process or, worse, not saying anything at all.
“Disclosure upfront may be tough initially, but it’s better than a lawsuit,” says Robert A. Sayas, an attorney with Sayas, Schmuki, Rondini & Plum S.C. in Wauwatosa, Wisc. “Disclosing early is like a boxer taking a jab. You can recover. But a lawsuit is a knock-out punch.”
In addition, be sure to check with an attorney or title company if you’re unsure of anything you tell prospective buyers about a home, advises Terry Tremaine, an agent with Century 21 Mike Bowman in Grapevine, Texas. “It gives everyone a comfort level, and will project on to the sellers.”
Using an incomplete property description.
A property’s street address may be all you need to find it on a map, but you generally have to give more specific details—such as lot and block numbers—to properly fill out real estate paperwork. “Laws are very exacting regarding what constitutes a legal description,” and you could find yourself with an unenforceable sales contract if you don’t provide the required information, says Michael Baucum, a transactional real estate attorney in San Antonio. Check with local tax authorities if you’re not sure what you need to include.
Weighing in on a home’s condition.
You may be an expert on selling properties—but that doesn’t mean you should be in the business of advising people on their physical shape. If a client asks if a system in their home needs repairs before the property goes on the market, or a visitor inquires about a home’s condition during an open house, resist the temptation to offer your opinion. Instead, tell them to consult a certified property inspector, advises Brian Copeland, chief of broker services for Village Real Estate Services in Nashville, Tenn.
“Your job is to negotiate which [recommended] repairs to do,” not decide if something needs to be fixed, says Copeland. “We are not contractors or structural engineers. We are marketers. Our expertise is to keep the deal together and make the customer happy. Giving opinions outside of your expertise is a huge legal pitfall.”
Saying whether a neighborhood is “safe.”
You may have your opinions about whether a particular street is good for families with children or dicey after dark, but sharing how you feel could be a fair-housing violation. Your best bet is to let clients know that you can’t answer questions about whether a neighborhood is safe. Instead, point people toward crime statistics and other objective data, or recommend they look around the area at different times of day on their own to get a firsthand view of what it would be like to live there, says Copeland.
“It’s a slippery slope, so you have to be a steward of your words,” says Copeland. “You can’t let your guard down and start saying things that don’t have a place in our profession.”