What to Do When Buyers Discover Post-Closing Issues

plumbing pipe with red wrench and blue wrench on pipe

Everything looked great in the house. You closed. The buyers were happy. And then … they discovered a leaky pipe and a hole in the floor. The buyer did have a home inspection before closing, and the agent advised another one, which the buyer declined. But after closing, the buyers discovered the leaky pipe and the hole in the floor hidden under carpeting. 

It’s nice to close and be done with a sale, but what if there are post-closing issues? If you’re the agent for the buyer who now has a problem, you want your client to be happy. Happy clients are good for referrals and repeat business, and unhappy clients are more likely to sue. They didn’t in this case, but that doesn’t mean the agent didn’t need legal advice.

How to Handle Post-Closing Issues 

First, you don’t have responsibilities to your client post-closing. That said, you want to maintain a good relationship, so what can you do—and what should you avoid if post-closing issues arise?

The CRES Legal Team suggested that the agent advise the client to consult with experts, such as a contractor and plumber to get estimates for fixing the problems. In this case, the cost to repair looked to be under $4000, which is in the California small claims court range. The agent could also recommend making a claim under the home warranty. 

Agents should always be careful not to give advice outside  your realm of expertise. You should document your recommendations in case there’s a future case against you. 

Get Advice and More from the CRES Legal Team 

The buyer spoke with an attorney. The buyer’s agent sent a demand letter to the listing agent. Eventually all parties came to an agreement that assigned no blame but that paid the buyers a sum to cover costs. 

While it sounds like a good outcome to this post-closing issue, the agent wasn’t done yet. He needed a release for all parties to sign prior to release of the money. The agent knew better than to draft this release himself and turned to the CRES Legal Team. 

The Pre-Claim Legal Team is there to provide advice if an issue may turn into a claim. They can also draft letters, releases, and other documents that come up in the process of addressing such issues

If you have a legal question related to post-closing problems or need a release to deal with a potential issue, wouldn’t you be relieved to know you have access to free legal advice? CRES real estate Errors and Omissions clients do. Clients can call CRES ClaimPrevent® Legal Services 7 days a week and receive a response from an experienced attorney within 4 hours or the next business day. Plus, every recommendation is confirmed in writing. It’s just one of the things we do to help clients prevent claims. 

Can we help you with your real estate E&O policy?  Learn more about E&O in your state.  

What post-closing issues have you encountered? 

This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.

Originally Published November 18, 2020

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