When you’re helping people buy and sell real estate, you’re dealing with large sums of money –- and sometimes with strong emotions. Buying or selling a home is among the most significant life events for many people. When things don’t go as planned, they may take legal action against a real estate agent and the agency for which they work.
If someone believes an agent acted improperly, they can also file a disciplinary grievance with them. An agent could end up losing money in the lawsuit and their license as a result of the grievance. Unhappy buyers and sellers can allege negligence, fraud or conspiracy. Even when an agent prevails in these cases, their reputation can suffer long-term harm. Defending yourself can also be costly in time and money.
Communication, record keeping and honesty are key
Legal actions and grievances are hazards that come with the territory when you work in real estate. However, there are things that you can do to help minimize the chances that one will either happen or be successful. Let’s look at some:
- Keep your clients informed of any significant developments in the process – whether they’re buying or selling.
- Keep thorough records of your communications with your clients, including phone calls, texts, emails and in-person interactions. That includes documenting any advice you give them and any decisions they make.
- Leave the big decisions to your clients. It’s your job to provide advice. However, don’t let them leave any significant decisions, like whether to lower the asking price or accept an offer, up to you.
- Don’t give your clients false or unrealistic expectations. Be honest, even if it sounds like you’re being pessimistic.
When should you ‘fire’ a client?
Don’t be afraid to cut ties with clients whose demands or expectations are unreasonable -– or those who ask you to do something fraudulent, unethical or discriminatory. Your contract with your client should have a clause that gives you and them the ability to walk away. Even better, get to know potential clients and their expectations before you agree to represent them.
If you have concerns that a client is unhappy enough to bring some type of action against you, it’s wise to talk with a real estate attorney. They can provide you with valuable guidance and help you protect your career and reputation.