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Did Your Realtor Make an Honest Mistake or can You Sue for Malpractice?

On Behalf of | Apr 1, 2014 | Articles

Traditionally, the theory of buyer beware has ruled real estate transactions. However, things have changed significantly and now the realtor has certain duties towards the person they are representing, including loyalty, full disclosure, obedience, and confidentiality. In other words, the real estate agent should:

  •  Show loyalty and protect your interests
  • Fully disclose all information he is aware of pertaining to the property
  • Do what you tell him to do—as long as it’s legal—and not take it upon himself to make decisions in your name
  • He or she must also keep all dealings with you confidential

Let’s take a closer look at these duties based on which you might determine whether or not you should be suing your realtor for malpractice.

Full Disclosure

The realtor is obligated to disclose any material fact that could have an impact on the value of the property or on its desirability. Note that a real estate agent is only obliged to disclose material defects to someone he is not representing. However, he must disclose any and all information, including transactional information such as the other party’s negotiating position, that could affect the deal to the person he is representing.

So, if you are the buyer and the realtor is representing you but doesn’t tell you that someone was murdered in the house, you might be able to sue for malpractice. On the other hand, if the realtor is representing the seller, you don’t have a case because a poor history isn’t classed as a material defect.


A realtor is duty-bound to obey any instruction given by the party they are representing as long as it is legal. So, let’s say that you ask your realtor to make an offer of $150,000 on a property listed for $175,000. The agent decides against it without consulting you because he thinks the offer will never be accepted. If the property then sells for a price below the listed price, you could sue for malpractice.

On the other hand, if you tell your realtor not to inform the buyer of any material defects of the property, and he goes ahead and does it anyway, you don’t have a case. Remember, a realtor is obligated by law to disclose material defects to any interested party, even if he represents the seller.


A real estate agent has to keep any information that could adversely impact their client’s position confidential. For example, if your relator tells buyers that you are willing to accept a lower price than the advertised one, and as a result you are forced to sell the property at a lower price, you can sue for malpractice.

However, if the realtor represents the buyer and knows you will accept a lower price, you can’t sue because he is protecting the interests of his client.


A real estate agent is obligated to be loyal to his client, meaning that he needs to do anything and everything legal to make sure his client is in the strongest position possible. For example, if you’re selling a property and your realtor buys it himself only to sell it right away for a profit, you might have a case of malpractice as the real estate agent was supposed to make sure you got the best possible price on the property. If he invested in the property to upgrade it and then sold it for a profit, this is not malpractice because it wouldn’t have garnered a higher price as it was.

Determining whether or not you have a case against your real estate agent for malpractice can be complicated, which is why you should consult a lawyer specializing in real estate litigation.

If you think you have a real estate malpractice claim please contact one of the real estate litigation attorneys at Makarem and Associates directly at 310.312.0299 or by email at [email protected].