The Big Bear Report

The Big Bear Report

Wednesday, May 16, 2018

May 2018 Report

Why Use a Local Agent? Here’s why…
Every real estate transaction presents potential legal pitfalls. Buyers and sellers bring in suits against their brokers or agents for a variety of reasons. Combine a strong housing market with an increasing litigious society and you have the recipe for lawsuits.
Misrepresentation is by far the lawsuit that brokers face the most. Fifty seven percent of lawsuits brought against Realtors nationwide were for misrepresentation and twelve percent were for failure to disclose. “Misrepresentation” is the misstating of some material fact of the property or the area and “failure to   disclose” is just flat out not revealing some important fact of the property or area.
Attorney Bill Janson is president of a Broker Risk Management company and has made a career out of keeping California real estate agents and brokers out of the reach of the long arm of litigation. Speaking at a Realtor Expo, Jansen cited example upon example of missteps that resulted in agents and brokers being named as defendants in lawsuits that never should have been.
Janson cited; “the most common scenario that results in a lawsuit is from agents working outside their geographic area of competence and expertise.” Each city has its own ordinances, point of sale, building codes, use limitations, inspection and disclosure requirements, etc. In addition, each area has its own particular disclosures and forms known to the local Realtors. These could include local fire hazard areas, pending changes in zoning, retrofit, rent control, noise issues, nuisances, erosion / land slippage, septic or sewer issues, etc.
Just one example of an actual claim is when an agent representing buyers agrees to list their home 30 miles away. An out-of-area buyer’s agent brings a buyer. After the close of escrow, the buyer noticed a foul smell, and neighbors identify the source as a sewage treatment plant four blocks away that was not disclosed to buyers. Research shows that all local brokers disclose the treatment plant. Buyer sues and collects from listing broker and seller for failure to disclose.
California law requires licensees to be competent in the area in which they practice. The Bureau of Real Estate (BRE) can revoke or suspend a real estate license if a licensee “demonstrated negligence or incompetence in preforming any act for which he or she is required to hold a license.” Solution: rather than try and handle properties outside of a licensee’s geographic area, its best for the agent/broker to simply refer their client to a Realtor that is knowledgeable in their general area of expertise.
For this reason alone, I have decided it’s in the best interest of my clients to cancel my membership in the California Regional Multiple Listing Service (CRMLS). Trying to work with agents and brokers outside their area of expertise has been quite problematic. We have our own local MLS that serves our membership and that feeds all listing data to the public sites like, Zillow, Trulia, etc. The Big Bear real estate market is a unique market in California. If a buyer wants to buy in Big Bear, they will find me or one of our agent/broker members that are published in these real estate sites. This way, I can assure all my clients that the likelihood of a lawsuit will be greatly diminished.       
Until next month, see you at the top.                                                           

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