Nearly 60 percent of real estate professionals say they believe REO-related disputes will increase over the next two years. What’s more, 76 percent said they believe it will be among the top three issues they will face in real estate, according to the National Association of REALTORS®‘ newly released 2011 Legal Scan: Legal Issues Facing Real-Estate Professional.
In the survey of real estate agents, brokers, attorneys, and educators, survey respondents said disclosure in these transactions remain a main culprit to problems, pointing to banks and listing brokers who sometimes fail to disclose known material defects about a property.
Overall, according to the 2011 Legal Scan, the top three issues that cause the most disputes in a real estate transaction are dual agency, disclosure, and breach of fiduciary duty.
Short sales, in particular, are causing more disputes in some of these areas, the survey found. Short sales are more commonly being listed in “as-is” condition, which has “resulted in a decline of quality of seller disclosures,” the survey notes. Another disclosure problem reported is the failure of listing agents to report that the property is or will soon be in a short sale situation.
Source: “Brokers Foresee an Increasing Number of Lawsuits Related to Short Sales,” Realty Times (July 26, 2011)
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