5 Tips to Keep Realtors Out of the Court Room
5 Tips to Keep Realtors Out of the Court Room
As a real estate attorney, one of my biggest passions is working with real estate agents in Central Florida. I love being able to solve problems for them and helping them fix mistakes but my true passion is educating them and helping them avoid these problems to begin with so that their practice can be as seamless as possible.
Today, I want to discuss five things that a real estate agent can do to help them avoid problems in a courtroom or before an ethics commission.
- Follow up text messages with an email
I understand – text messages are an important part of your practice, they’re extremely convenient and almost necessary by today’s communication standards. However, it’s so, so, so important than any substantive text message is followed up with an email, even if the client has already responded.Why? Evidence.
It’s so simple to follow up with an email that says you are “confirming our text”, then you keep that email in your file where it is easily accessible for years. Text messages are much harder to retrieve and submitted into evidence.
- If you represent a buyer, makes sure you get HOA documents and pass them on yourself!
When a client moves into an association and finds out there’s a huge fee that they’re suddenly responsible for, who do you think they’re going to blame for them not knowing? It’s going to be their realtor.The easiest way to cover your bases in this situation is to obtain the HOA documents (meaning the CCRs) and the HOA financials, which you have a right to request, and email them directly to your buyer yourself. Don’t trust anyone else to do it on your behalf. In that email, tell them specifically that they need to read the documents carefully.
If they have any questions about the terms and conditions or the financial information, make sure you refer them to the appropriate expert – either an attorney or a CPA. Don’t let trying to save your client money get you in trouble down the line.
- Make sure that you identify the source of information
One thing that often gets a real estate agent in trouble is when they report information to their client without providing the source. For example, if the building inspector gives you some information about the house that you want to pass on to your buyer, make sure you say, “according to the building inspector.” If a lender’s representative says something, say, “according to the lender.” A title company? Say, “according to the title company.”You don’t want to put yourself in a situation where you’re vouching for information that you probably can’t verify because your client will justifiably assume that information is coming from you and they will then hold you accountable.
- Don’t be an expert
I know that many real estate agents are extremely well versed in real estate law, in matters of accounting as they apply to real estate, and there could be issues or questions that your seller or buyer might have that you think you have the answer for. Even if you think you have the right answer, the problem is that you might be wrong and if you’re wrong, it could go really, really bad. Then who is to blame? You, the real estate agent.It’s a simple matter to refer them to a CPA to answer financial questions, to an attorney to answer legal questions, to almost any other professional to answer whatever doesn’t fall directly within your role as a real estate agent. Don’t get yourself in trouble trying to be a one-stop-shop for your client only to have it later ricochet back on you when your good act goes punished.
- Avoid closing in escrow
I get it, there are many times when you have to close in escrow, but there’s also many times when you’re closing in escrow just because it’s convenient.Say, for example, that you’re escrowing $5,000 to replace an air conditioner – 90% of the time, that’s going to go very smoothly and there’s not going to be any problem. The other 10% of the time that there’s a problem, though, that problem could be major and often does result in expensive post-closing litigation. Again, who are the clients going to blame when that happens? The realtor.
If you’ve got a client pushing to close in escrow simply because it’s convenient for them, make sure that you advise them in writing (email is fine) that you know that while these type of arrangements usually work out, they can go bad. Explain what could go wrong and cover your bases.
I hope that this information was helpful to you and, as always, if you have any questions about any of the issues I’ve discussed or any questions at all, please don’t hesitate to reach out to us.
-Merideth