70% of Sellers Admit They’re Willing to Engage in Improper Conduct

Cinch Home Services has more than 40 years in the home warranty industry.  Several years ago they published a survey of 494 home buyers and 476 sellers which had been  conducted over the course of the prior year. Seventy percent of the sellers surveyed indicated they’d be willing to withhold information, take advantage of buyers, engage in manipulative negotiation tactics, misrepresent facts, be confrontational or “bend the rules”.  Unfortunately, when sellers engage in deceptive acts which lead to lawsuits, the agent is most likely to be dragged into the fray.

The Dilemma.  The National Association of REALTORS® (the NAR”) has routinely indicated the top claim against agents continues to relate to disclosure issues. Obviously, agents should never engage in misrepresentations, which includes concealment. In fact, NRS 645 imposes a duty upon a licensee to disclose any material condition the agent knows about or, through the exercise of reasonable care and diligence, he or she should have known about. However, the problem faced by ethical licensees is the propensity for your clients to engage in inappropriate conduct, which could unwittingly cause you to become involved in the controversy.

Improper Conduct
Recommendations.  The NAR recommends that you encourage the seller to reveal all known facts and defects and share them with the buyer. Remember, even if the seller neglects to do so, the agent may still be held liable under certain circumstances. You should always review the seller’s real property disclosure form to ensure all questions are answered. In one case, I represented an agent who failed to do this simple task and caught the fact that the seller did not answer whether there had ever been prior mold contamination.  Not surprisingly, a lawsuit was subsequently filed against the seller and her agent after the buyer discovered mold contamination!  Finally, if the seller refuses to disclose a material fact or defect that you become aware of, remember that you have a duty to disclose and should discuss this with your client.

The most important defense.  No lawyer can assure you that you’ll never be named as a defendant in a lawsuit.  However, one of the best ways to assist in your defense is to have proper documentation.  If you have attended one of my free CE courses, you’ve likely heard me chant “DOCUMENT, DOCUMENT, DOCUMENT” as this is some of the best advice I offer agents.  The NAR suggests “document any information the seller has provided to the buyer, such as answers to questions about the condition of the property. Keep any research you’ve done separately on the condition of the property as well.”

Interested in learning more about our “Licensee Protection Plan” and the ways to minimize the chances of being sued, look for our next presentation of “30 Ways to Lose Your License” a free 3-hour CE course.


Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. Review of this information does not create an attorney-client relationship.