Simply put, a real estate agent is a licensed professional who is authorized to conduct real estate business in a given state. They represent buyers or sellers of real estate, which is essentially property consisting of land and the buildings on it. Real estate agents have obtained an education and training in all matters related to real estate, such as the laws governing the sale of property, and have passed a state board exam to get the proper license.  

Real estate agents are responsible for several tasks, depending on their education, licensing, and certifications. Some examples of what a real estate agent does include:

• Handling standard client forms;
• Drafting and preparing offers and other related paperwork;
• Providing satisfactory customer service if a client has an issue;
• Answering basic questions that clients may have, such as explaining the home purchasing/selling process;
• Reviewing real estate contracts, such as lease agreements, purchase agreements, and rental contracts;
• Negotiating sale prices between sellers and the clients;
• Closing any deals;
• Showcasing properties to potential buyers; and
• Guiding clients through tours of the property.

This is by no means an exhaustive list of what real estate agents do. The term “real estate agent” is sometimes used interchangeably with the terms salespeople and brokers. However, brokers may work alone because of the more rigorous state board licensing process they are required to complete. Typically, real estate agents must work with a broker.

There are some things real estate agents are not allowed to do. Some examples include:

• Giving legal advice (unless they are a licensed attorney and are acting in capacity as your attorney), as this would be considered an authorized practice of law;
• Giving tax advice, as they are not licensed to do so; or
• Violating the Fair Housing Act, such as disclosing certain details about a neighborhood or community that are protected by the Act.

What are the Most Common Lawsuits Against Real Estate Agents?

Real estate agents may be subject to numerous legal claims, given the nature of their work. The most common legal claim occurs when the agent is negligent in their fiduciary duties. A fiduciary is an individual who is entrusted with acting on behalf of another individual and making decisions in their best interest. 

Fiduciaries are entrusted with legal duties or obligations to their client because of their experience and specialized training. A real estate agent’s most important aspect of fiduciary duty is the requirement to be honest and make decisions based on the best interest of their client.

The agent will be spending most of the property buying process working independently of the client, whether negotiating with other parties, coordinating inspections, and reviewing contract documents. As such, they are required to act as a proxy for their client by making decisions for the client, and reporting information in an open and honest manner. Some common breaches of fiduciary duty include:

• Receiving secret profits or fees that are not disclosed to the client(s);
• Failing to inform a seller of other offers on the table, after an offer has been accepted; or
• Declining or accepting an offer without the client’s approval.

Some other common lawsuits filed against real estate agents include:

• Failing to Disclose a Property Defect: The seller or buyer is ultimately responsible for disclosing any property defects involved in a real estate sale. However, agents also have a responsibility to disclose anything that materially affects the property, which means they must disclose facts when the value or desirability of the property is negatively impacted.
  • These defects can include construction issues, improvements without permits, covenants, leaks, cracks, termites, noise, or nuisances. Even if the agent did not know about the defect, they may still be sued if they represent a party that did know about the defect.

• Negligence: Agents may also be sued for negligence if they fail to exercise due care towards others. Due care is essentially what a reasonable or prudent person would do under the same circumstances.
  • In this case, it would be what a fellow real estate agent would have done. A client may claim that their real estate agent knew or should have known something, but failed to take any action to prevent or address it.

• Failing to Keep a Person’s Personal Data Safe:Agents have access to a lot of personal information, especially from their clients. Should they fail to keep that data safe, such as protecting it from hackers by installing security software, they may find themselves subject to a legal claim for any damages resulting from the misuse of a client’s data.

In addition to the lawsuits listed above, you may also be able to sue a real estate agent for lying. However, suing for a lie or misrepresentation is not as simple as it sounds. The nature of the lie will have a huge impact on the legality of such a suit. If the lie was overt, such as the agent claiming that the house has never been remodeled when it actually was, you could have a case. 

However, if the lie was something that the buyer should have been aware of, there may not be a case. An example of something that the buyer should be aware of would be if the agent claimed that the house was one block from a school, but there are no schools within one block of that property.

What Remedies are Available If You Sue a Real Estate Agent?

In the majority of real estate related lawsuits, a court will award monetary damages to a plaintiff who has been wronged by a real estate agent. These awards could include:

• Compensatory damages associated with a breach of contract or misrepresentation. Additionally punitive damages may be available in cases where there was fraudulent misrepresentation;
• Remedies in equity, such as the agent being required by the court to cancel the contract they breached, through rescission; or
• Other damages such as emotional distress, or any other injury damages that may have occurred due to the actions of the real estate agent.

It is important that when suing a real estate agent that you gather all documents which evidence any of the damages you may have suffered. Further, it is also important that you mitigate your damages, meaning that you should not cause yourself additional harm and then try and recover that additional harm from the real estate agent. 

Do I Need an Attorney to Sue a Real Estate Agent?

If you believe you have been wronged by your real estate agent, you should immediately consult with a skilled and knowledgeable real estate attorney in your area. An experienced attorney will help you understand the specifics of your case, and help you determine if you have a valid legal claim. Additionally, they will represent you in court, if necessary.