A few days ago, I ran into the Realtor who would have acted as mediator on a complaint made to our local Association of Realtors by a homebuyer over two years ago. I was the agent representing the sellers in this transaction, and they had moved to Washington State after the sale.
Naturally, I was curious to know if the buyers were still pursuing the case, which had seemed unjustified from the beginning. The mediator said that they were not proceeding with their complaint.
The sale took place in the hot market of a few years ago, and the buyers accepted the existing inspections ordered by the sellers, and did not get their own, although they were entitled to do so. The buyers later decided to replace professionally installed dual-pane windows with a sliding door, and damage was discovered by their contractor. They felt that the sellers should pay for all of their remodeling work.
Real estate legal expert Barbara Nichols, author of The No-Lawsuit Guide to Real Estate Transactions (McGraw-Hill, 2007), says that agents can get into trouble for undisclosed defects if the agents had information from the seller or from other sources, or had prior knowledge of a potential problem and did not disclose the defects. Agents are not expected to see through walls, and neither are home inspectors. The best approach is to refer only the most qualified inspectors to your buyer client who will be more likely to see clues of problems others may miss. She has a chapter in the book dealing with the importance of referring qualified inspectors and how to qualify them. She also have several useful ideas in the book for the seller's agent, to protect the seller if the buyer hires an unqualified inspector who may miss something. The seller could later be accused of knowing and failing to disclose the defect that was missed and still be vulnerable to a lawsuit.
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