risk matters
Buyer Claims Exaggerated Property Description Was Misinformation
a Real-Life Claim Situation involving Overstated Adjectives
SITUATION:
A real estate agent listed an antique colonial home for a couple who spent significant amounts of time and money to refinish the wide-board floors, re-paper the walls, and stain the natural wood molding. They also upgraded the kitchen and bath plumbing fixtures and installed additional electrical outlets in the bedrooms.
PROBLEM:
With the cosmetic improvements, the home was in beautiful condition, so the agent marketed the property in the Multiple Listing Service and advertising material as being "totally renovated."
MISTAKE:
The agent’s marketing representations overstated the improvements that were made to the property.
RESULT:
Relying on the advertising material, a potential buyer mistakenly believed the home’s electrical and plumbing systems were completely upgraded. He decided to submit a purchase offer, but waived the home inspection and eventually closed escrow. Shortly thereafter, he learned that the electrical and plumbing systems were old and deteriorating and that the home lacked insulation. Without the funds to pay for the necessary improvements, he sued both the agent and the sellers alleging that they misrepresented the actual condition of the property. The matter was resolved when the defendants agreed to pay damages and attorneys fees.
PREVENTION:
During the process of selling real estate, always avoid adjectives that overstate improvements to property. More often than not, these descriptions lead to higher expectations and the dissatisfaction of buyers who may believe they didn’t receive what they bargained for. Also, be certain when stating facts about items like the age or structure of a property, and don’t gloss over a potential buyer’s concerns. It is important to never oversell ("With a little paint, I’m sure this would be great!"). No one wants to be the recipient of a lawsuit and a loss of reputation.
For more information, please contact your AHS(r) representative at 1-800-735-4663.
Lori Cain is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa Oklahoma area, including midtown Tulsa, Owasso, Broken Arrow, Bixby, Sand Springs and Jenks. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.
