Whether purchasing a family home or investing in a rental or vacation property, real estate transactions inevitably involve complicated legal and financial considerations. With so much at stake, buyers generally trust their brokers to be competent, meticulous and honest about both the positive and negative aspects of any given purchase.

Unfortunately, when an agent’s negligent or willful misrepresentation leads to a buyer making a purchase he or she would not have made knowing all the facts, the results can be emotionally and financially devastating.

Common sources of misrepresentation

Material misrepresentation and failure to disclose are the two most common sources of realtor negligence or fraud.

Material misrepresentation may occur when a broker fails to inform a client of some potentially significant defect or drawback to making the purchase. Examples of items an agent may overlook or conceal include:

  • Actual property boundaries or home square footage
  • Neighborhood issues with excessive noise, traffic or crime
  • Major construction plans in the area

Selling agents must also disclose certain specific property issues under Texas state law, including:

  • Previous and/or current structural damage due to water, fire or termites
  • Location of a property within a floodplain
  • Existence of an easement or other encumbrance on the property
  • Title problems, including liens, public record errors and illegal deeds

Degrees of misrepresentation

In some cases, an agent may have made a simple mistake with no intent to deceive and with little harm done. However, whether due to negligence or purposeful fraud, when a broker’s misrepresentation leads a buyer to make a problematic purchase, the buyer may be able to seek recourse under the law.