Can the listing agent be held financially liable for failing to do her due diligence when listing a property?

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Can the listing agent be held financially liable for failing to do her due diligence when listing a property?

My offer to purchase a condominium was for listing price with FHA only financing. I questioned on 2 separate occasions my realtor who provided the MLS sheet listing agent populates this info and double checked with listing agent, both confirmed fha eligible. My offer was accepted with FHA only financing only to find out 10 business days later the complex was not nor ever was FHA eligible.

Since I was going through a first time homebuyer program, this cost me 1/2 point in rate, 1/2 in gift moneys for the down payment and the cost of an FHA home inspection. I am now going conventional and making up the difference with my own money. Can I seek reimbursement or recourse due to the misrepresentation and lack of due diligence on the listing agent’s part?

Asked on May 10, 2018 under Real Estate Law, Indiana

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You can sue the agent and her employer for negligence.  Negligence is the failure to exercise due care (that degree of care that a reasonable listing agent would have exercised under the same or similar circumstances to prevent foreseeable harm).  Your damages (monetary compensation you are seeking in your lawsuit) would be what was foreseeably caused by the negligence of the listing agent such as the costs you incurred.


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