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CLAIMPREVENT® BLOG

How a Typo Can Cause a Real Estate Lawsuit

Typos happen every day. If your team is busy writing up multiple listings, contracts and property marketing materials, they’re bound to happen. Unfortunately, even the most innocent of typos can result in your brokerage facing a lawsuit.

Here’s what you can do to prevent problems from happening. 

Listing Errors

Accuracy of listings is so important. Typos in address details or property features can not only significantly affect your chances of selling a property —they can also lead to lawsuits. A seller may sue for negligence if you’ve wasted their time and money by marketing incorrect property details. Buyers might also sue if they’ve purchased a home they thought had particular features because of your typos, but later find out it’s not what they thought. 

The unfortunate reality of listing errors is that they’re often shared to third-party websites and other listing services such as Realtor.com and Zillow. Fixing small typos across multiple platforms can be a time-consuming process. 

Inaccurate Numbers

Incorrectly stating the number of bedrooms or bathrooms of a property can lead to issues, particularly for buyers purchasing sight unseen. Can you imagine if a buyer thinks they bought a 4 bedroom, 2 bathroom home, with off-street parking for two cars, only to discover there’s only one bathroom and no parking? 

It’s easy to accidentally transpose numbers or make minor typos when dealing with numbers. Here are some examples that can lead to serious problems for your brokerage:

  • A property advertised as 3000 square feet instead of 2000 square feet
  • A price written incorrectly in an offer
  • An apartment listing with the wrong apartment number
  • An incorrect down payment amount written into a contract
  • A typo in a land parcel number or property title

Typos in Purchase Agreements/Contracts

Typos in purchase agreements/contracts may cause serious issues. A typo might seem to be a minor issue, but in a contract, it can change the whole meaning of the terms and conditions of the agreement. It’s true that all parties to the contract need to read and check the agreement themselves before signing. But, if it’s inaccurate, who do you think they’ll sue first? Your brokerage will be at the top of the list. 

Errors relating to mis-spelled names are very common. These typos can cause several issues for the buyers especially. Misspellings can prompt questions from their loan underwriter and can cause major delays in the transaction process.

Licensees and brokers need to ensure names are spelled correctly for each party to the agreement before getting everything signed. The best way to ensure accuracy is to ask the seller or buyer how their names should be spelled in the contract. 

Once a typo has been made in a contract, the only way to fix it is to amend it or reissue it in consultation with the parties to the contract. Brokers cannot make changes to a signed contract. Most online signing programs lock the contract once it’s signed for the protection of all parties. 

When a typo goes unchecked, it can lead to a significant administrative burden to fix it. Mistakes of this nature can cause embarrassment, harm the seller or buyer, affect your brokerage’s reputation and lead to lawsuits if unnoticed. 

What You Can Do At Your Brokerage To Avoid Typos and Lawsuits

Use Spellcheck

Whether it’s Microsoft Word spellcheck or Grammarly, running documents through an automated spelling and grammar check can be useful. However, a review by a human is still a good idea, because most spellcheckers will check for spelling or grammar mistakes, but they may not spot a correctly-spelled word in the wrong place.  

Emphasize the Need for Accuracy With Your Team

Emphasize the importance of accurate documentation with your team as part of your induction process and regular team training. Your team needs to understand the pitfalls of seemingly small typos and the impact typos can have on them and your brokerage.  

Have Internal Checking Processes in Place

Some brokerages have a dedicated person to double-check all listings and/or contracts. A second pair of eyes over all documents can help to spot any typos that can potentially cause problems for your brokerage. 

Good Recordkeeping is Essential 

Fact-checking property documentation is made all the more easier with good recordkeeping. Ensure property files are kept up to date. Important details such as title numbers, addresses, seller/buyer names and other relevant information should be at the fingertips of those people in your office that need it. 

Don’t Rush The Process

Typos often happen when people are in a hurry or feeling pressured to finish something. As a broker, it’s understandable that you want to publish listings quickly and get contracts out fast. But make sure your desire to do things as fast as possible doesn’t impact on accuracy. Problems typically take longer to fix and it’s better just to take the time and get it right the first time. Your team should be supported to take the time they need to ensure all of their documentation is accurate. 

Use a Reputable Insurer

Having adequate insurance coverage if a client lodges a claim against your brokerage is essential in real estate. CRES E&O + ClaimPrevent® offers tailored Errors and Omissions Insurance and access to expert legal advice via our team of qualified attorneys. 

As part of one of the largest insurance brokers in the world, we have access to E&O and other insurance options that few other brokers have. Let us find you the right protection at the right price from our unparalleled resources. For further information about CRES insurance, contact us at 800-880-2747 for a confidential discussion today.

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