Disputes between clients and their agents (read: employing brokers) regarding the disclosure of property conditions now edge out agency issues as the most common complaint filed nationally against agents, according to a recent report on national trends from Legal Scan. While most disputes are between licensees, there is an increase in clients bringing non-disclosure claims against their agents.
first tuesday take: Property condition disclosures may be a problem nationally, but in California, a growing number of brokers and their agents are facing complaints from buyers, accusing them of breaching their fiduciary duty by failing to show qualifying properties listed in multiple listing services (MLSs) and to write and submit offers. The complaint generally occurs out of the buyer’s misunderstanding of the broker’s duties when the buyer’s broker (and his agents) orally agree to locate property without a written buyer’s listing agreement. The broker and his agents do not have a due diligence duty to conscientiously locate property sought by the buyer in an oral employment, as they do under a written buyer’s listing agreement. [See first tuesday Form 103]
Then, months after the initial efforts to locate property began, the agent has yet to prepare and submit a purchase offer on behalf of the buyer. As a result, buyers are left with no sense of forward movement to meet their objectives of owning property.
When dealing with REO or short sale properties listed in MLSs, brokers and agents need to show properties to their buyers routinely — regardless of the likelihood an offer will be accepted, much less close. When locating a property suitable to the buyer, write, submit and wait for the lenders response on the offer or short sale approval. There is no harm in having an offer rejected, but failure to write and submit offers is detrimental to all, and reduces the likelihood of broker fees. Ownership begins with an offer.
Re: “Legal battles over real estate transactions increase” by Los Angeles Times