9 Most Common Reasons Real Estate Agents Get Sued

In today’s “sue-happy” world, real estate agents are particularly vulnerable to getting sued. The slightest mistake could open the door to a costly lawsuit that could wipe one out financially and ruin a good reputation. Even the most diligent real estate agent can get sued. With so many details to deal with, it’s easy for something to slip through the cracks. As a real estate agent, there are proactive steps you can take to protect yourself and your business from getting slapped with a lawsuit. Here are some of the top reasons real estate agents get sued and what you can do to keep it from happening to you:

1) Breach of Contract

A client can claim breach of contract if a real estate agent doesn’t stick to the terms of the agreement. This can include deviating from the time frame stated in the contract. Take time to go over the contract carefully with clients and clarify any unclear clauses, terms or other issues.

2) Accidental Bodily Injury

Check your property frequently for physical risks such as debris, snow and ice so someone doesn’t fall and find you liable for the accident. Protect your business from accidents with a strong insurance policy.

3) Giving Misleading Advice

Real estate agents can get sued for giving incorrect or misleading advice. Always keep a written record of advice that you provided to a client pertaining to buying/selling a home. It’s easy to follow up with a quick email confirming your advice and your client’s response. Always note: Realtors should never give tax advice.

4) Discrimination

Agents can be sued over claims that someone was discriminated against due to race, color, sex, religion, sexual orientation and sexual identity. Familiarize yourself with the Fair Housing Act to prevent being accused of and potentially sued for discrimination.

5) Misleading Buyers

While you want your home to be as appealing as possible, never exaggerate on the features and conditions of a house. Be truthful about all claims so nothing can be misconstrued. Even a little white lie could lead to a major lawsuit and it’s just not worth the risk.

6) Withholding Information

Withholding property defects about a home such as water damage, zoning issues or potential hazards like asbestos or lead paint could lead to trouble. Even things such as a death in the home or alleged haunting should be disclosed to the buyer.

7) Data Breach

Hackers are out there! Do what it takes to protect your client’s information by investing in security software. It’ll give you peace of mind and could save you down the road. Keep paperwork locked up. Change your passwords regularly and make sure your data is encrypted.

8) Lack of Inspections

Sometimes important inspections are missed. It’s a real estate agent’s job to recommend “third party” inspections for things such as structure issues, pools, chimneys, roofs and septic systems. An overall home inspection is always a good place to start.

9) Bad Clients

Avoid difficult clients who make unreasonable demands or who constantly question you. An angry and irrational client could turn on you regardless of how careful you are. Even worse is the difficult client who asks you to engage in unethical, discriminatory or fraudulent behavior.

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