What You Need to Do About Post-Closing Problems

keys in door of house

You’ve closed a transaction in which you were the selling agent for the buyer. Everything went well … until the buyer discovered leaks and drainage issues that weren’t disclosed.

Leaks, mold, termites, low water pressure, septic problems … any number of things can go wrong with a house that leaves buyers with large bills and a great deal of dissatisfaction.

You want to keep your client happy. At the same time, you want to make sure you and your business are covered. How should you handle post-closing problems? What are your responsibilities? How can you address the issue without overstepping your duties (or the law)?  

4 Steps to Dealing with Post-Closing Problems

Recently we got a call from a CRES client who was in just this situation. His brokerage was the selling agent for a buyer who had, after closing, found water intrusion that was not disclosed. The buyer wants the seller to pay for repairs. The CRES Risk Management legal advice team weighed in on how the selling agent should deal with the issue.

They offered these steps for helping a client with post-closing problems:

  1. First, call the listing agent and identify the problem.
  2. Follow up by sending an email to both the listing agent and the home inspector in the same email, detailing the problems. In the email, include all costs of repairs and advise that the buyer is seeking a way to resolve the issue. (Additionally, to protect yourself from post-closing problems, take steps before closing. For example, encourage a home inspection, but don’t oversell it. Make sure you’re using best practices when suggesting potential home inspectors. And of course, document your advice about third-party experts.)
  3. Forward the thread to the buyer client. Along with the forwarded thread, suggest that the buyer consult with an attorney and perhaps more construction experts.
  4. Save all emails about the post-closing problems and your response in the client’s file.

Note that as the selling agent, you do not owe any post-close duties to your buyers. That said, you want to maintain a positive relationship. You are helping them deal with the situation by suggesting they seek the advice of an attorney and construction professionals. And that suggestion  is legally appropriate.

Take care not to assure them it will all work out or to place blame on the inspector or seller. An attorney is best able to advise them on whether they have a case for legal recourse. Construction experts can give more information about the problem and possible solutions. Your role is simply to suggest they seek help from the appropriate channels.

What if you were the seller’s agent in this situation? Start here for tips on avoiding common issues that cause real estate E&O claims. If you think a claim is headed your way, seek legal advice. The good news for CRES clients is that you can get help 7 days a week. We want to help with any issues that put you at risk before there is a claim.

Do you have questions about how to handle post-closing problems – or maybe another legal issue? CRES clients can call the CRES ClaimPrevent® Hotline 7 days a week. Clients receive a guaranteed response within 4 hours or next business day, with recommendations confirmed in writing.

What issues have you dealt with post-closing?  

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.

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