Some people have been in this situation before. They've recently gone out and purchased the home of their dreams. In many cases, it has been flipped and offered for sale by the contractor. The buyer has taken out a sizeable mortgage from the bank and feel a little bit stretched; however, it's worth it because the home is everything that they've ever wanted. Unfortunately, just after getting used to their routine, they realize the home has a host of problems that weren't disclosed during the purchase negotiation process. This is only one of the myriad of reasons that home flippers and real estate agents get sued.
1. Failure to be completely honest about property damage
This is the case discussed above. Flippers and brokers might try to hide property damages in order to sell a house and make their money. In North Carolina, material facts may need to be disclosed.
2. Incorrect legal advice
Prospective buyers are often offered legal advice regarding the real estate market, property taxes and even issues regarding land use and zoning. This is problematic because, in most cases, the contractor or real estate agent isn't a lawyer. A buyer who follows this inappropriate advice could wind up in a lawsuit, And, the broker's license could be in danger because brokers cannot offer legal advice.
3. Medical bills
Sometimes, homes go on the market that are not safe for sale or occupancy. After all, flippers have a lot of money invested and brokers don't get paid until a house sells. These houses might have extensive damage and it is not uncommon for a prospective home buyer to get injured during a showing, resulting in a lawsuit for medical bills. If the house had significant damage that made it unsafe, the selling agent could be held liable.
4. The fiduciary responsibility toward the client
Many people don't realize that flippers and brokers make their money based on the price the house sells for. If a house sells for more money, the real estate agent makes more commission or the flipper is paid more profit. This could incentivize a broker to drive up the price of the house for their client who is looking to make a purchase. Or, it could cause the seller's agent to recommend a selling price below market value, in order to make a quick sale. Breach of fiduciary duty is one of the most common reasons brokers get sued.
5. Breaking trust with their clients
Remember, nobody gets paid until the house sells. It is a common temptation for agents to pass along confidential information in order to close a sale. Some of this information may include the buyer's financial circumstances, how high they are really willing to bid on the house or, conversely, how low the price needs to come down to for a buyer to make an offer.
Work With An Experienced Attorney
If you are facing a legal problem with your broker or construction contractor anywhere in North Carolina, in the Raleigh metro area, work an experienced law firm. Call the Triangle Law Group to meet with an attorney.