More Closing Time, Less Courtroom Time

By Robert Freedman, Senior Editor, REALTOR® Magazine

It’s a tough market and you’re trying to put bread on the table, but don’t cut corners on disclosures to get a deal done—it will come back to haunt you.

That’s the message a real estate legal expert left with me yesterday after a conversation about something no one wants to talk about: the increase in lawsuits as unhappy buyers look for someone to blame.

The legal expert also sells real estate. Her sales are down this year, as you would expect, but her time spent in the courtroom is up—not because she’s being sued. She’s frequently called upon by courts to be an expert witness. It’s these calls that have shot up, and what she’s seeing in the courtroom is a jump in cases in which sales associates are charged with insuffiently ensuring all property conditions are disclosed.

I’m not sure how many of these cases will eventually absolve the practitioner. I’m guessing many of them will, because real estate attorneys have told me in the past that many times the case is simply about an unhappy buyer who wants to vent.

But even so, no one wants to be put in the position of having to defend oneself. The legal expert I spoke with yesterday says she’s concerned as much about the lawsuits she expects to see tomorrow as the ones she’s seeing today. The concern is that, in an effort to survive today’s tough market, practitioners might be tempted to pay less than sufficient attention to all the property conditions that should be disclosed, particularly in the case of distressed properties.

Her advice: Always err on the side of too much disclosure, otherwise even after markets improve you might be spending more time in the courtroom than at the closing table.

To stay up on legal issues, you might find the law and ethics page at REALTOR® Magazine Online helpful.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at

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  1. Brad Kilian

    How important is it when you are a new agent looking for a broker to work for that that broker carry E & O Insurance? I read that only 17% of independant real estate brokers carry e & O insurance. The broker I have found to be the most comfortable to work with and provides the most personal training and help as a new agent does everything except carry e & o insurance. If this is so important as some say in the real estate business why doesn’t 75% or more of real estate brokers carry it? Can you give me any other information about this?

    Brad Killian

  2. Ruth Burk


    How does E & O insurance work? At my last brokerage, it was provided for me. I am now at a new company that I am not sure covers me, individually.


    Ruth Burk