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When Your Real Estate Agent Gives Legal Advice

Now this is one thing that you should be very careful about.

Real estate agents are in the game of buying and selling homes. At their core, they are sales people and rightly so. Given this fact, you need to be very leery of any real estate agent that offers legal advice. Why? They haven’t got a clue and are potentially breaking the law.

You go to view a home and notice the owner has done a lot of custom work. You love it. The home is unique and amazingly so. You put in an offer through your real estate agent. After some haggling, a deal is reached. Escrow gets underway and then a problem arises. The appraiser notes the home has more square footage than recorded in the county records. It becomes obvious the owner did the customization without getting permits. It also becomes obvious that some of the work is not up to code.

At this point, the deal should either die or the seller should be offering major financial concessions. You are not really sure what to do. Your real estate agent tells you to take the concessions. She has seen this before and knows that the building department will okay the home. If not, you can always come back and sue the owner for breach of warranty and contract. Taking this advice, you go ahead and buy the home.

After taking possession of the home, you are told by a building inspector half the home will need to be torn down and rebuilt to meet code. You are outrages and speak with an attorney about filing a lawsuit against the seller. The attorney looks at the deal, notes all the disclosure done by the seller and the concessions on price. Guess what, you have no legal remedy. Everything the real estate agent told you is wrong.

This type of scenario plays out repeatedly. Real estate agents are famous for giving out legal advice regarding issues they have no business discussing. They are versed in the practice of selling and buying real estate, not offering legal opinions. To this end, more than a few real estate agents have been sued for “the unauthorized practice of law”. In the scenario above, the buyer would in fact be able to sue the real estate agent and successfully so.

In truth, most real estate agents give legal advice without really thinking about it. They also do it without malice. They are just trying to make a sale. While they can incur liability for doing so, it is incumbent on you to realize that an agent is not a lawyer. If there are legal issues related to a real estate matter, you should speak with an attorney to get accurate advice. Otherwise, you are taking a huge risk.