Are you using “liability” as an excuse to avoid helping your clients?
In this episode, we’re tackling a tricky topic: the fine line between being helpful and being liable. It’s a line many Realtors struggle to navigate, but don’t worry—we’re here to break it all down for you.
You’ll also hear us reflect on the power of having systems in place, the importance of treating every client consistently, and why it’s critical to educate your clients (even when it’s an uncomfortable conversation). If you’ve ever felt nervous about overstepping—or not stepping up—this episode is a must-listen.
Key Quotes/Takeaways
“Giving advice isn’t a liability—it’s literally your job as a Realtor.” – Katy
“Skipping the inspection is a bigger liability than attending. Your clients need you there.” – Alissa
“The more you document, the less you’ll have to worry if something goes wrong.” – Katy
“Agents who avoid giving advice are just avoiding doing their job.” – Alissa
“Your job is to guide and protect your clients—not let them ‘run amok.’” – Katy
Products, People & Previous Episodes Mentioned
Hustle Humbly Freebie: Due Diligence Checklist hustlehumblypodcast.com/makesure
Email Templates 101: For communicating clearly with clients and documenting conversations.
Errors and Omissions Insurance: To protect Realtors from professional liability claims.
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Helpful vs. Liable: Doing Your Job Without Fear
Welcome to another episode! Today, we’re discussing the fine line between being helpful and being liable in real estate.
We’re breaking down common liability concerns, sharing real-life stories, and offering practical advice to help you navigate these tricky situations without fear.
The Myth of Liability in Real Estate
Many agents claim, “I can’t do that—it’s a liability!” But avoiding responsibility doesn’t eliminate risk; it often increases it. Agents must balance providing value to clients while protecting themselves legally.
One of the biggest misconceptions is avoiding home inspections due to liability concerns. Some brokers advise agents not to attend inspections, but is that really the best practice? If you’re not there, are you leaving your client unsupported?
The Importance of Attending Inspections
Skipping inspections out of fear of liability can backfire. If buyers go alone, they may misinterpret findings or fail to ask key questions. Worse, if something goes wrong later, they may blame the agent for not guiding them.
Best practice: Attend as an observer. Make it clear you’re not an inspector, but you’re there to support the client, take notes, and ensure the process runs smoothly. Documentation is key—follow up with a recap email of the inspector’s findings.
A Real-Life Example
A buyer who couldn’t attend their inspection due to work obligations relied on the agent to video the inspector’s summary. Everything was documented properly. However, after closing, the buyer called the broker, furious over a “hard-to-flush” toilet. The issue was minor, but without documentation, the agent could have been in trouble.
Understanding Contractual Liability
Agents must help clients understand contract terms—especially when they can and cannot back out.
A common issue arises when buyers misunderstand their rights.
If agents fail to explain this clearly, they risk being held accountable. The key? Always document conversations via email so there’s proof the buyer was informed.
The Danger of Vague Repair Requests
One lawsuit example involved a buyer submitting a vague repair request with over 20 unclear items. The seller agreed to all repairs, but after closing, the buyer found issues and sued everyone—the agent, the inspector, and the seller.
This could have been avoided if the agent:
✔️ Ensured repairs were clearly defined
✔️ Verified work completion with receipts
✔️ Advised clients on reasonable expectations
Lesson: Agents must guide clients through repair negotiations carefully.
Real-Life Stories: Liability Issues After Closing
The Engineer vs. The Electrician
A buyer, an engineer, was outraged after closing when he discovered that turning on all five bathroom heater vent lights at once tripped a circuit. He accused the seller, a licensed electrician, of fraud.
However, the inspection was clear, and no issues were noted. This shows that some buyers will find reasons to be upset, no matter how minor.
The Seller Who Called the Broker
A seller was furious after seeing six cars at the home inspection. He hadn’t mentioned that he had $25,000 in antique guns under the bed and demanded the agent remove the listing.
The problem? He was already under contract. The agent calmly explained that the sale was proceeding, whether he liked it or not.
Why Documentation Saves You
Documentation is the best defense against liability. Whether it’s an email confirming conversations or a due diligence checklist, having records protects you if a dispute arises.
Best practices:
✔️ Send recap emails after important conversations
✔️ Use standardized email templates for consistency
✔️ Maintain records of contracts, repairs, and client communication
Surveillance and Privacy Concerns
More homes have security cameras, meaning everything agents and clients say can be recorded. Agents should:
✔️ Warn buyers they may be recorded during showings
✔️ Avoid discussing sensitive topics inside a home
✔️ Never assume a private conversation is truly private
Example: A seller got upset because an agent didn’t wear protective booties—as seen on the home’s security camera.
Key Takeaways: What’s Actually a Liability?
Not everything agents fear is a true liability. However, these are legitimate risks:
🔹 Misrepresentation – Providing false information about a property
🔹 Failure to disclose defects – Hiding known property issues
🔹 Breach of fiduciary duty – Acting against a client’s best interests
🔹 Unauthorized legal advice – Interpreting contracts when not a lawyer
🔹 Contract errors – Missing critical details in an agreement
Things that are not actual liabilities:
❌ Attending an inspection as an observer
❌ Advising clients about resale value
❌ Explaining contract terms in plain language
Final Thoughts: Be Helpful, Not Fearful
Agents should focus on professionalism, not paranoia. The key is to provide value while protecting yourself with proper documentation and communication.
Real estate involves some level of liability, just like any profession. Instead of avoiding responsibilities, agents should:
✔️ Educate clients clearly
✔️ Maintain detailed records
✔️ Follow ethical practices
