Are You Overstepping Your Bounds… Into a Potential Lawsuit? | The Zebra Blog

Are You Overstepping Your Bounds… Into a Potential Lawsuit?

Most of us at some point in our real estate career have found ourselves saying or doing something that makes us wish we could turn the clock back. This may be a result of saying something or doing something that causes regret and we can’t undo it. We are left with the stress that comes with knowing one has overstepped their professional bounds. In the moment, it may be difficult to see where that boundary line is as providing great client care can quickly slide into the “uh-oh zone”. Here are six ways agents can get themselves into hot water in the name of client care:

1. The seller who wants their roof cleaned. – You might be thinking that this is such an obvious NO boundary. So why did I list it first? Believe it or not I have run into this particular situation many times over the past two decades. A seller who is low on money may need their roof cleaned before listing. The agent offers to clean it so they can get the property listed. So, what’s the big deal? LIABILITY and INJURY are the big deal. Don’t ever put yourself…or your clients in this position.

2. The seller who wants you to “handle it.” – This is a problem that affects almost every agent that has ever listed a home. The listing agent might suggest a few ideas to help the home achieve better street appeal or make a better first impression, and ultimately the seller asks the agent to just handle it. The agent feels compelled to complete the work because they recommended it and unless there are parameters following, the agent can easily walk right into a possible lawsuit. What happens when that stump you just removed is tangled into a gas or cable line and you hit it? What happens if you knock a sprinkler head off and the basement gets flooded because you didn’t know you did it and it was only discovered after the sellers walked into their flooded basement? If you think these things don’t happen…they absolutely do.

3. Paying for things you shouldn’t be paying for. – If your definition of “handling it” is to hire someone to do work on a client’s property, unless parameters are followed, you may be putting yourself in the middle of a potential mess. I have witnessed this numerous times over the years when an agent hires someone they trust and that person does something wrong. The agent has done the vetting of this person or company and the seller relies on the agent to make a good choice. However, what happens when the good choice turns into a nightmare? I can promise you that the likelihood of the seller turning to you to correct it because you hired that person is very high. You can make all the recommendations you want but make sure the seller is the one that makes the final decision on who they hire. And make sure the seller is paying the bill unless you have a separate written agreement with the seller that says otherwise.

4. Promising a home will sell if only the seller would do XYZ.l know it is hard to walk into a home with bright green carpet that is 40 years old and not want to see it replaced before listing the property. It’s okay to want to see all those changes done but you can’t promise an outcome you can’t guarantee. I have seen homes with bright green carpet sell within a day of being listed with multiple offers on the property. It wasn’t the carpet that sold the home or prevented the home from being sold. It was the lack of inventory and robust buyer pool that got that home so many offers. Imagine if you had of delayed the listing because of the green carpet and the market changed for the worse in that time period?

I have also seen sellers put $80,000 into a kitchen remodel that an agent assured them would help them sell their home only to have the home sit on the market for 6 months. The problem was that by the time the house was ready to put on the market, the market had too much inventory so the seller’s home didn’t sell at the price they had increased it to because of the kitchen. Before you make any promises that a seller will get more money if they invest more money into fixing or remodeling their home, be very careful because you can’t guarantee that and you don’t have a crystal ball to see the future market.

5. Giving someone advise when you are not qualified to do so. – This is an easy situation to find yourself in because clients often ask us all sorts of things. It is critical to know what you are qualified to answer and what you are not qualified to answer. If someone asks you a question that you do not have training or experience in, you need to let them know that it is beyond your area of expertise. It is not a sign of weakness to say that, it shows your honesty and integrity to your client.

6. The Blank Addendum. – Every MLS and company has a blank addendum (Form 34 in the NWMLS) – This one little blank addendum has caused more agents more problems and lawsuits than any other form. When you fill out a blank addendum you are practicing law. When I was a Managing Broker of a large real estate office I wouldn’t allow ANY of my agents to complete one without my approval. If there isn’t a form for it there is probably a good reason why so please tread carefully.

Don’t get yourself into trouble! When you are asked to do something, stop and ask yourself if what you are being asked to do is something you should do.

You can leave a response, or trackback from your own site.

Tell Us What You Think!

Awesome, timely advice for real estate agents. Delivered weekly.
  • Fresh trends
  • Best practices
  • Research and statistics

Enter your email and stay on top of things,