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How to Avoid Legal Issues in Real Estate

Blog Contributor Business Challenges, Code of Ethics, Customer Service, ethics, Legal 4 Comments

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Sammer Mudawar

Sammer Mudawar

By Sammer Mudawar

First, I would like to start by making it clear: I am not an attorney and nothing herein (legal word) should be construed as legal advice. This is a simple narrative on how common sense and sound business practices can help avoid some very common situations that can lead to legal problems in our profession. These opinions and observations come from my experiences as a working agent, managing broker, and active member of the grievance committee at the Pacific West Association of REALTORS®.

Communication

Communication, or lack thereof, is by far the most common and easy mistake to avoid. It can snowball a simple problem into a mountain of chaos. Real estate transactions (especially residential) are emotionally charged and sensitive by nature. When agents fail to properly communicate with all parties, it can easily lead to frustration and make people feel hopeless, which can lead to desperate actions. Eventually, clients will feel the need to get involved or get their legal advisors involved and that is typically not a good thing. Do not avoid phone calls, e-mails, texts, or Facebook messages when there is a problem. Address the situation promptly and make sure everyone knows what is going on. Remember, bad news early is good news and most problems can be solved with open lines of communication.

Ego

It is not uncommon for real estate professionals to become personally offended when issues arise during a transaction; and they often feel the need to prove they are right or know more than the other agent, whether by knowledge or experience. Many times the battle of the egos starts with simple mistake in our choice of words. For example, instead of saying “my client” we say “I” or “me”, insinuating we actually have the ability to make choices on our clients’ behalf. Mistakes like this can create an adversarial relationship between the agents, jeopardize a transaction, lead to a lawsuit, and create liability for yourself. In theory, there really shouldn’t be issues between agents because the contract is between buyer and seller; agents should be weary to interject themselves. So don’t create unnecessary problems for yourself by letting your ego get the best of you. Remember your role in the transaction and that the issue is typically between buyer and seller not the agents.

In closing, much of our income comes from our ability to solve problems before they become legal in nature – consider it compensation for pain and suffering. Sometimes it’s better to answer that annoying and untimely phone call, let your ego suffer a bit, or not respond to an emotional text if it’s not going to move things forward or be in the best interest of your client. Lastly, there is a time for the attorneys to intervene and you and/or your broker should know when to make those recommendations to the client.

Sammer Mudawar is the owner of RE/MAX Prestige located in Anaheim Hills and Costa Mesa in Orange County, Calif. You can learn more about RE/MAX Prestige by going to www.joinremaxprestige.com and consumers can visit his personal site at www.liveoc.net.

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Comments 4

  1. So True! Excellent advise. The best agents keep their emotions out of the transaction. I typically tell my clients that my biggest role is not finding the home but rather resolving the “problems” and getting us to the closing table.

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