The real estate industry has been increasingly competitive in recent years. People are strategizing on different levels to get their properties sold or bought. After all, real estate purchases are significant investments and the most expensive transaction a person gets involved with. With so much money at stake, it’s inevitable for legal disputes to happen among real estate agents, buyers, and sellers.
From finding your desired property to the day you receive the keys, it’s essential to be aware of the legal requirements and process involved in real estate. Even in commercial properties, property transactions are filled with many legal aspects, from construction, environmental issues, zoning, title insurance, and taxes. This is where property and commercial attorneys come in to serve as legal consultants and help the people involved identify potential pitfalls or suspicious contract terms.
Every real estate transaction is prone to legal pitfalls, where sellers or buyers may file lawsuits against agents or brokers for different reasons. In fact, it’s rare to finalize a real estate deal without a legal representative who will facilitate every part of the transaction between two parties. So whether you’re a real estate agent or broker, it’s essential to know how you can prevent legal issues with your clients. Read below to learn the different ways to avoid lawsuits in real estate.
Most lawsuits filed against agents often fall in this category. According to the Australian Consumer Law (ACL), both real estate agents and sellers should disclose all information, material facts, or defects in a property. This is very important as disclosing property information affects the decision-making of the buyer. Failure to do this leads to severe lawsuits, whether if the purpose is to give a false impression, hide important information, or deceive or mislead clients into a contract.
More than half of lawsuits filed against real estate agents are typically about disclosure issues. If the buyer discovered negative issues that were not previously disclosed, the seller or agent is liable for the damages. Unfortunately, real estate agents cannot guide their clients from hiding any harmful information or material about the transaction. Although only a few agents lost their licenses because they revealed a negative issue about the property, many have lost a lawsuit and lost their license in the process because they failed to disclose property defects.
If the seller conducts a home inspection and the inspector discovers some issues, it’s essential to advise the seller to address the defects before moving forward with a sale. If the seller refuses to fix the problem, a better option is to counter it with a lower sale price. In highly competitive housing markets, sellers opt to forgo the inspection to land a bigger deal. Although this puts you in a better position to land a quicker transaction, this approach is a risky strategy.
Customer service is key
Your clients are vital to the success of your real estate business or career. Customer service is the core of any business process, with all the real estate firms and agents competing on the customer experience front. To get quicker and smoother deals, you should respond and interact with your clients at all times.
Every real estate transaction is filled with inquiries and complaints, so it’s essential to address them quickly. Most of the time, people complain because they need someone to listen. Being a good communicator and a listener can go a long way in resolving problems before they turn into lawsuits. For most real estate lawyers, clients file lawsuits because they think no one is listening to their complaints.
The best you can do as a real estate professional is to listen, communicate, and offer suggestions to fix the problem. Offering a helping hand can boost your client’s trust and your reputation as an agent or broker.
Know your limits
Clients have high expectations of their agents or brokers. They expect them to know each detail involved in the transaction. Most agents go overboard by providing information or legal advice that they’re not authorized to give just because they’re tempted to please their clients.
When a client asks an unfamiliar question that’s not related to your field, remind them to ask someone else who’s an expert. Take note that you’re not a lawyer, title expert, accountant, or surveyor. As much as possible, limit your expertise within your field.
If you’re planning to venture into the world of real estate, keeping tabs on legal concerns and abiding by real estate laws can save you from any legal issues in the long run. As a real estate professional, it’s essential to safeguard your career, business, and reputation in your day-to-day dealings. Take note of the suggestions above and stay updated with real estate trends to steer clear devastating legal consequences.