Can I Sue My Realtor for Breach of Contract?

by Phil M. Fowler ; Updated July 27, 2017
Real estate agents may be susceptible to lawsuits for breach of contract.

If you have a signed written contract with your real estate agent, and your agent breaches that contract, you have the right to sue your agent for breach of contract. You also may have a separate legal claim for professional negligence if the real estate agent engaged in conduct that does not meet the professional standard for real estate agents.

Written Contract

Most real estate agents require their clients to sign a brokerage or listing agreement or, for buyers, a buyer representation agreement. The reason a written contract is required is because state laws require contracts for real estate to be in written form. Oral contracts generally are insufficient when it comes to real estate. If you have a signed written contract with your real estate agent, it will outline the terms the agent must meet.

Breach of Duty

Your contract with your real estate agent will, or at least should, identify certain duties and obligations that the real estate agent must satisfy. Because real estate agents generally write their own contracts, the terms are generally in their favor and are less than specific regarding the real estate agent's duties. You will need to identify a specific violation if you hope to assert a legal claim for breach of contract.

Damages

Your written contract with your real estate agent may specify a minimum level of damages in the event of breach by either party. These are often called liquidated damages. More likely, however, the contract will not specify liquidated damages, which means you instead will have to prove how the real estate agent's breach of contract caused you damages. Maybe the breach caused you to miss an opportunity to sell your home or caused you to sell your home for too low a price.

Related Negligence Claim

It is sometimes easier to assert a negligence claim against a real estate agent than a breach of contract claim, primarily because real estate agency contracts generally have few specific obligations imposed on the real estate agent. Even without a specific breach of contract by the agent, however, you still may have a claim against your agent if he did not act in a professional or reasonable manner.

Duty to Mitigate

State laws impose a duty of mitigation on parties who experience a breach of contract. In the context of a real estate agency agreement, this means you must make some reasonable effort to avoid being harmed by the real estate agent's breach of your contract. If the agent is not listing your home as she should, you should try to get another agent to list your home. Or, if the agent is not actively seeking out a new home for you to purchase, you should probably attempt to find a replacement agent to work on your behalf. Just be aware that if you are wrong, and your agent has not breached the contract, you could be in breach of contract if you hire a new agent to replace your current agent. You should only work with a new agent if you are certain your current agent has already breached the contract.

References

  • "Modern Real Estate Practice"; Fillmore W. Galaty, Wellington J. Allaway, Robert C. Kyle; 2007

About the Author

The Constitution Guru has worked as a writer and editor for "BYU Law Review" and "BYU Journal of Public Law." He is an experienced attorney with a law degree and a B.A. degree in history with an emphasis on U.S. Constitutional history, both earned at Brigham Young University.

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