Disputes Between RE Agents and Clients

Disputes Between Real Estate Agents, Brokers, and their Clients

Real estate transactions are often among the most significant financial decisions people make in their lives. Many individuals turn to real estate agents or brokers for their expertise in the local market and to help ensure their transaction is successful.

While most real estate professionals uphold their duties diligently, disputes between clients and their agents can arise. Here are some common issues causing disputes between agents, brokers, and their own clients:

Failure to Communicate

Effective communication is the cornerstone of any successful real estate transaction. Clients depend on their agents to keep them informed and engaged throughout the process, and the Oklahoma Real Estate Commission (OREC) even requires prompt communication for licensed agents.

Our firm frequently receives complaints of infrequent updates on property listings or market trends, unanswered calls, emails, or text messages, and lack of transparency regarding offers, negotiations, or potential issues.

To mitigate the risk of bad communication, it is crucial for both parties to establish clear expectations regarding communication preferences and frequency from the outset of the relationship. Agents should document all interactions, respond promptly, and proactively update clients on relevant developments.

Representing Both Parties to the Transaction

Conflicts of interest can undermine the integrity of a real estate transaction. When an agent represents both the buyer and the seller, or fails to clearly communicate which party the agent actually represents, dual agency questions come into play and often lead to disputes.

Clients most often complain that information is not being disclosed fairly between the parties, and negotiations are skewed in favor of one party over the other.

To prevent dual agency disputes, agents should act like the professionals in the relationship and should clearly disclose their role, and even obtain written consent from both parties if the situation calls for it.

Lack of Availability for Showing Properties

Availability is a crucial factor when it comes to buying or selling a property. Disputes often stem from clients feeling that their agent is not responsive or accessible for property showings, leading to missed opportunities or delays in the process. In a competitive market, sometimes availability is an agent’s best asset.

Not Being Active in Marketing a Property for Sale

Proactive marketing plays a pivotal role in selling a property at the best possible price. When seller clients perceive their agent as lacking enthusiasm or effort in marketing their property, disputes often follow.

To mitigate these disputes, agents should create a comprehensive marketing plan tailored to each property, incorporating professional photos, virtual tours, and active promotion through various channels. Regularly updating clients on marketing efforts can also foster trust and transparency.

Failure to Negotiate Effectively

Negotiations are a critical aspect of the real estate process, and clients expect their agents to advocate for their best interests. Disputes may arise when clients believe their agent did not negotiate effectively or overlooked opportunities for better terms.

Lack of Disclosure Regarding Fees and Costs

Financial transparency is crucial in any real estate transaction. Disputes often arise when clients feel blindsided by unexpected fees, costs, or commissions. The best agents are able to clearly communicate the financial realities of a proposed transaction to give their clients confidence they are making the right decision.

Resolution and Preventative Measures

While disputes between clients and real estate agents are not uncommon, they can be minimized. Our most successful broker/agent clients use a combination of the following strategies:

• Clear Communication: Establishing open and honest communication channels from the beginning can prevent misunderstandings.
• Written Documentation: Contracts and agreements, such as an exclusive right to sell agreement with any appropriate addendums or additional terms, should clearly outline roles, responsibilities, and expectations to reduce ambiguity.
• Third-party Mediation: In cases of dispute, third-party mediation or arbitration may help avoid court.
• Education and Training: Ongoing education and training for real estate agents, such as continuing education courses, can help them stay updated on industry standards and best practices.
• Ethical Standards: Real estate professionals should adhere to strict ethical standards and codes of conduct to maintain trust with their clients. This can include both OREC regulations and brokerage/company policies.

Additionally, parties to a listing agreement or other contractual arrangement can always agree to mutually release each other from their contracts. When this happens, agents and brokers often “reserve” names of the parties that they have shown the property to, requesting commission compensation if those reserved parties close a transaction for the given property.

Real Estate Attorneys You Can Trust

Disputes between clients and real estate agents or brokers can be stressful and costly for all parties involved. Avenue Legal Group has the experience and ability you need to successfully resolve an agent, broker, and client dispute. Contact the firm to resolve your matter.