A real estate agent is hired by the seller of the house to effectuate the sale. The seller is the one who typically pays the real estate agent a commission and is therefore the employer of the real estate agent. However, real estate agents owe duties to all parties, including the buyer.
Real estate agents, have a limited responsibility to observe and discover defects in the house. This is primarily the job of home inspectors. It is very difficult to prove that a real estate agent knew or should have known of a problem through observation and should have disclosed it to a potential buyer. The law typically protects agents from not disclosing information if a home inspector inspects the house.
The primary issue with real estate agents concerns failures to disclose pertinent information learned from other sources. If an agent receives a condition report, an expert report, or a repair estimate during the course of listing the house, the real estate agent then has an obligation to make sure that all subsequent potential buyers have this information. Many claims against real estate agents are based upon an agent failing to provide material information received from a prior potential buyer.
Sometimes, real estate agents make representations outside of what they learn from the seller. This may relate to property lines, zoning restrictions, or even conditions of the house. If a real estate agent provides false information to a buyer that was not given to the agent by the seller, the agent may be liable.
A final area where real estate agents get in trouble relates to procedural problems. During the course of a sale, issues come up. Wells and septic tanks need to be inspected. Home inspectors discover defects. The seller often agrees to make certain repairs pursuant to a request by a buyer. The real estate agent is charged with the obligation of making sure that everything is done pursuant to the agreement. If the seller agrees to make repairs, it is the agent’s duty to make sure that these repairs are done and that the buyer is notified of any complications. Competent real estate agents put everything in writing. The buyer and the seller should sign agreements acknowledging what was or wasn’t done and the agent should make sure that all parties are on the same page. There should be no unresolved issues by closing.