According to Inman News, more homebuyers are blaming their agents for their
purchases — and hauling them to court. The extreme seller’s market of 2021 and
early 2022 pushed a lot of buyers to forego inspections in bidding wars and hope for
the best. Then something bad happens. According to Victor Insurance Managers a
growing number of recent homebuyers are blaming their real estate agents — in court.
Buyers that often overpaid for the property want someone to pay.
More Lawsuits. Higher Judgments.
Victor Insurance Managers, a large underwriting firm, reports it saw a 9% rise in errors
and omissions lawsuits against real estate professionals in 2022. (Inman News) These
lawsuits have also become even higher-stakes ordeals in recent months, running an
agent or broker an average of $39,000 in a typical losing case. That’s 13 percent
higher than it was in 2021, Victor Insurance Managers reports.
Protect Yourself and Prevent Lawsuits.
Many of you used the “Disclosure to Buyers Purchasing Property in a Seller’s Market”
on the recommendation of RMAA. It includes a Buyer acknowledgment that making an
aggressive offer to purchase a property, whether it is an aggressive price or waiving an
inspection or financing contingency, involves taking greater risks. That was smart.
There are other actions that will help to insulate you against a buyer lawsuit, especially
when you do not include the Purchasing Property in a Seller’s Market disclosure.
1. Communicate risks early and clearly. Buyers will take risks when they want
something even when we are not in a hot seller’s market. Make sure buyers
know what risks they are taking.
2. Document conversations with clients in written form. Follow a conversation up
with an email that confirms the conversation. People often do not hear what
you are saying. Save that email.
3. Get a “Read Receipt” when you send the email. A “Read Receipt” will come in
very handy to prevent a lawsuit.
4. Maintain communication after the sale. Buyers are less likely to sue an agent
that is present with them. If something does go wrong, use the conversation to
remind them that this was a risk they knowingly undertook to win the property!
Document that conversation in writing too. Even if you don’t think it’s
appropriate to send a confirming email to the client after the sale, send it to
your file. It will jog your memory when you need it!
5. Be patient, helpful and kind. It goes a long way.
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