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Attracting Real Estate Clients and Showing Property: ClaimPrevent® Summary 1

Our new ClaimPrevent® Summary Series explores what brokers should include in inductions for new hires from a risk management perspective. In this first article, we address issues for attracting and dealing with clients. 

New hires, as well as existing team members, need to know how to assess the risks and, more importantly, how to mitigate those risks so they (and you, as their broker) don’t end up facing legal issues.

1. Real Estate Marketing and Advertising Issues


To protect your brokerage, every team member must understand the importance of accuracy and the consequences of incorrect information in marketing. All it takes is one small mistake to lead to a lawsuit — incorrect square footage, an exaggeration, or an overstatement. Key points to make:

  • When you advertise listings (your own, or those of another licensee), you’re liable for the information you include on your website, flyers, direct mail, email, and social media posts. So be very careful about any statements about the character or condition of the property. If it’s wrong, you may be held liable. Be factual.
  • If you make an actual representation about something that you didn’t personally verify, you should advise where the information was obtained. (“Square footage per the MLS,” etc.)

In Texas, for example, you should provide notice in writing that the information was obtained from another source (“Square footage per owner”), and you did not know, or could not have known the accuracy of the information. 


If you offer an online home value assessment on your website, your disclaimer should state that estimates arising from online home value assessments are no substitute for an official property appraisal and a comparative market analysis. 

Any website a team member may create must comply with the ADA (Americans with Disabilities Act). Individuals with a disability need to be able to access and view real estate listings. 

  • Any video needs to have a transcript of what is spoken in the video. If the video has no narration, create a transcript detailing what is shown in the video images, so the potential buyer can envision the property features.
  • As you load images on your website, load “Alternate text” with each image to explain the image in words to the sight-impaired.
  • If your website is using a feed directly from the MLS, best to include a disclaimer that you are not responsible for the accuracy of the information.
  • Websites should include a disclaimer in a “Terms of Use” statement. It should cover Limitations of Liability, Third-Party Links, and other terms of use. Ensure the disclaimer clearly says that you will assume no responsibility for the accuracy of the information on the website or blog.

2. Social Media Issues


Make sure licensees understand that their personal social media accounts, as well as their business pages (and websites), could get the brokerage in trouble, if licensees are posting inaccurate information about a  listing (or defamatory comments about anyone).

(On your licensees’ social media pages, brokers may considering asking them to add a disclaimer like: “Views are my own and not of my employer”.)

Some people are under the impression that posting on Facebook to a restricted group of friends and acquaintances is private. In a legal sense, it is in fact “publishing” information. Ensure your team understands this:

  • Publishing information on any social media site to any group can lead to liability if the content is defamatory or controversial. 


Regular team training on how to respond to challenging comments or posts can also be useful. Defamation is an umbrella term used to describe any actions taken to hurt another person’s reputation. 

  • When a false statement is spoken, it’s slander. When it’s published, it’s libel. For it to be considered defamatory, the statement must be false. 

Anything posted on social media should be considered the “public domain.” Do not post anything that could be seen as negative towards anyone.

If something negative is posted about the licensee, suggest that the licensee:

  • Acknowledge the review with a brief and factual response, without admitting responsibility for anything.
  • Tell the reviewer what you’re going to do next.  For example:

Thank you, Max, for informing us about this. We will contact you asap to discuss, and we look forward to getting this rectified for you.”

  • Then contact the reviewer separately to try to resolve the issue.


The need for accuracy and staying within your scope of expertise extends to social media.

  • Be sure you provide correct answers when responding to questions and comments on social media
  • Check and double-check typos in the property description which could mislead prospective buyers
  • Do not comment on things outside the scope of a real estate professional (e.g., mortgages, neighborhood crime statistics, development possibilities, etc.)


There have also been cases where lawsuit claims have been lodged for misuse of intellectual property (for example, using images owned by a third party). The accidental disclosure of confidential information (images of properties showing personal belongings or breaching privacy) can also be problematic.

  • Be sure you have the rights to an image that you post.
  • Check images, videos, and drone footage to be sure neighbor privacy has not been invaded.

3. Property Showings and Open Houses


Clients and buyers can ask questions outside of the scope of your expertise, and that’s how good real estate professionals can become embroiled in nasty lawsuits. Licensees should consider every response to ensure it’s factually correct and not misleading.

  • Real estate licensees in general are not qualified to provide specifics for: tax issues, legal issues, confirmation of property lines, view maintenance, easements, materials used in a home, remodeling or expanding a property, what’s acceptable to a HOA, and any other estimations. Don’t be tempted to estimate the cost of anything.

Here’s how to handle common questions:

Property Lines: The only way to be sure about property lines is to complete a property/land survey and a full title search. That’s what you, as the real estate licensee, should suggest to the potential buyer.

Views: You don’t know if there are any CC&Rs in effect that may or may not restrict the ability of properties below to build up. Or if any developments could occur in the future. Refer buyers to independent sources of information like the County Planning Department.

Materials Used: Recommend potential buyers do their own due diligence and seek a building inspection.

Estimations: Real estate licensees should not be drawn into estimations about measurements, space, costs, and ‘what-ifs’ when it comes to potential improvements, remodeling, or expansion. Recommend the potential buyer do their own independent research to see if these things are possible.

Repairs: Never offer advice on how easy or extensive a repair may be, and never estimate the cost. Always refer your client to a qualified professional.

When you don’t have the facts, steer clear of specifics and direct your potential buyers to other independent sources or suggest they hire a qualified professional to help with their decisions, such as:

  • Home Inspector, Surveyor, Termite or Pest Inspector, Qualified contractor that can provide expert advice and quotes, attorney, accountant, etc. 
  • The County Planning Department or other government bodies can be helpful for checking any potential building restrictions or compliance issues. 


Steering is a method of discrimination in real estate. It happens when a real estate licensee influences a buyer or prospective tenant’s choice of housing because of their skin color, race, national origin, religion, gender, disability, or familial status.

Steering influences, guides or directs property buyers or renters to specific areas because of their particular characteristics. Here are some examples of behavior to avoid:

  • Only showing properties within a certain area, even if the client/buyer’s criteria indicate that other locations would be just as suitable.
  • Discouraging purchasers from buying into an apartment building or suburb because they are “different” from others who live there.
  • Suggesting buyers stick to neighborhoods where there are others with the same religious background/race/familial status.

Steering is not always as overt as this. Subtle hints like these could all cross the line:

  • An area or neighborhood “is not a great place to raise a family.” 
  • A house might be “too large” (when talking to a single woman). 
  • There are better schools in a certain area.

It’s best to: 

  • Show listings based on a buyer’s (or renter’s) criteria and don’t let your own biases influence what you show. This means showing buyers (or renters) what the options are and letting them make their own choice. 
  • Licensees should avoid giving any subjective information (opinions) to prospects. For example, saying things like “nice neighborhood,” “safe area,” or “close to a good school.” 
  • Recommend that prospects do their own due diligence and seek out independent, objective third-party information, for example: crime statistics, research on local schools, contacting the local police department, etc. 

4. Working with Prospects and Customer Service

Licensees need to be careful about what they say in person, in emails, and on social media, to not exceed your scope of expertise and stay within your scope of duties as a licensee. 


Stick to what you know as a real estate licensee. One quick way to get embroiled in a lawsuit is to be involved in activities or transactions far beyond your expertise or in unfamiliar geographic areas. 

Although you want to be helpful to your clients and potential clients, always decline requests that are beyond your expertise. Advise your client repeatedly in writing that you cannot give legal or tax advice. 

Never assume duties and responsibilities that you normally aren’t required to do (to try and be “helpful.”). A client may ask you to gather, research, or determine something — but you should not accept that responsibility. When you do assume a particular responsibility or duty, you are responsible for the information you provide, whether you ‘re qualified to provide it or not. And you’re also responsible for the outcome of assuming those duties.

  • Avoid the temptation to research anything (permits, easements, tax issues, etc.) for a client or potential client.
  • Do not research the law on a given subject for a client. The unauthorized practice of law may be illegal in your state and carry its own penalties.

Refer your client to a qualified professional to determine the correct information (and be responsible for that information). Never recommend a specific contractor or other expert, or hire someone for a client. You can provide a list of multiple providers — and allow the client to do their own research to determine who they want to work with. You can also refer the client to the local county bar association. Advise your client:

  • “If legal or tax advice is desired, consult a competent professional.”
  • Save all emails in your transaction file.

You may focus on residential real estate. Commercial real estate has its own set of best practices. If you’re offered a commercial listing, best to bring in another licensee experienced with commercial to avoid problems.


When selling properties that are covered by a Homeowners Association. Disclosure of anything that may affect a purchaser’s decision to buy or not buy a property is essential. It’s also important to be very careful what you tell prospective buyers 

Don’t assume anything. For a regular standalone property, it might be quite reasonable to assume a property owner can repaint their picket fence, or even replace it with a different, more modern fence. But properties covered by a Homeowners Association can have very strict rules which prohibit such things. 

  • Never tell a prospective buyer that something is okay. Real estate licensees should recommend to all prospective buyers to do their own due diligence (their own research and to consult with an attorney). Potential buyers can find CC&Rs and other Association Regulations online for many communities.

Your Real Estate Errors and Omissions Insurance Can Help

All CRES members have access not only to Risk Management resources like this ClaimPrevent® Summary Series – but also to our expert Legal Services.

We’ve specialized in protecting real estate brokers like you for more than 25 years. As part of one of the largest insurance brokers in the world, we have unrivaled access to more real estate Errors & Omissions  and other insurance options than anyone else. Let us do the shopping for you – and find you the best protection for the best price.

Check out our other summaries of key risk management issues:

ClaimPrevent® Summary 2: Licensee Responsibilities When Creating New Listings

ClaimPrevent® Summary 3: Seller Disclosures and Working New Listings

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