Buyer agent made an error in judgment

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Buyer agent made an error in judgment

James McGovern
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes

A buyer agent made an error in judgment and caused the buyer to lose their deposit. Should the buyer sue the agent?

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Jeff CopelandBusiness Member
Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
11mo

Impossible to answer without knowing more details. 

But first you need to review (or better yet, have an attorney review) the written representation agreement between the agent and buyer (often referred to as a Buyer Broker Agreement or BBA). It will dictate what type of legal action the buyer can and can't take (for realtors, it's often limited to mediation and/or arbitration), what the buyer agreed to waive or hold harmless, and who pays the legal fees in a dispute. 

For example, the Florida BBA states:

DISPUTE RESOLUTION: This Agreement will be construed under Florida law. All controversies, claims, and other matters in question between the parties arising out of or relating to this Agreement or the breach thereof will be settled by first attempting mediation under the rules of the American Arbitration Association or other mediator agreed upon by the
parties. If litigation arises out of this Agreement, the prevailing party will be entitled to recover reasonable attorney's fees and costs, unless the parties agree that disputes will be settled by arbitration as follows: 

Arbitration: By initialing in the space provided, Consumer () (), and Broker or Authorized Associate (_) agree that disputes not resolved by mediation will be settled by neutral binding arbitration in the county in which the Property is located in accordance with the rules of the American Arbitration Association or other arbitrator agreed upon by the parties. Each party to any arbitration (or litigation to enforce the arbitration provision of this Agreement or an arbitration award) will pay its own fees, costs, and expenses, including attorney's fees, and will equally split the arbitrator's fees and administrative fees of arbitration.

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  • Jeff CopelandBusiness Member
    Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
    11mo

    Impossible to answer without knowing more details. 

    But first you need to review (or better yet, have an attorney review) the written representation agreement between the agent and buyer (often referred to as a Buyer Broker Agreement or BBA). It will dictate what type of legal action the buyer can and can't take (for realtors, it's often limited to mediation and/or arbitration), what the buyer agreed to waive or hold harmless, and who pays the legal fees in a dispute. 

    For example, the Florida BBA states:

    DISPUTE RESOLUTION: This Agreement will be construed under Florida law. All controversies, claims, and other matters in question between the parties arising out of or relating to this Agreement or the breach thereof will be settled by first attempting mediation under the rules of the American Arbitration Association or other mediator agreed upon by the
    parties. If litigation arises out of this Agreement, the prevailing party will be entitled to recover reasonable attorney's fees and costs, unless the parties agree that disputes will be settled by arbitration as follows: 

    Arbitration: By initialing in the space provided, Consumer () (), and Broker or Authorized Associate (_) agree that disputes not resolved by mediation will be settled by neutral binding arbitration in the county in which the Property is located in accordance with the rules of the American Arbitration Association or other arbitrator agreed upon by the parties. Each party to any arbitration (or litigation to enforce the arbitration provision of this Agreement or an arbitration award) will pay its own fees, costs, and expenses, including attorney's fees, and will equally split the arbitrator's fees and administrative fees of arbitration.

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  • Elealeh Fulmaran
    Specialist · Member since 2025 · 483 posts · 270 votes
    11mo

    I get why you're heated; losing a deposit stings. Before suing, go fact-first: pull the signed contract, emails, timelines, and the contingency language tied to the deposit, then ask the broker in writing to review the agent's actions and propose a remedy. If the paper trail shows clear negligence that breached duty and caused the loss, consult a real estate attorney to assess recoverability and costs; if it's gray or contract-driven, negotiate a settlement through the brokerage's E&O carrier. Act fast, document everything, and let evidence decide litigation vs. quick resolution.

    2Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      11mo

      @Elealeh Fulmaran I will be the one receiving the deposit. There is an elderly lady who is the buyer. She had an agent who sucked 

      0Reply
    • Steve K.
      Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
      11mo
      Quote from @James McGovern:

      @Elealeh Fulmaran I will be the one receiving the deposit. There is an elderly lady who is the buyer. She had an agent who sucked 


      They probably have a different contingency in the contract they can use to back out and get the deposit back, like final loan approval. I'd be surprised if they end up losing their deposit. If they do, and I were you, I'd act in good faith and return the deposit or allow them to amend the contract and continue to closing, assuming you want to sell the property.

      1Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    11mo
    Quote from @James McGovern:

    A buyer agent made an error in judgment and caused the buyer to lose their deposit. Should the buyer sue the agent?

    What kind of deposit are we talking?
    typically a buyer does have some say  whether or not they ( buyers) sign a contract. 

    0Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      11mo

      @Joe S. 4k deposit. The agent forgot to include a clause in the offer that before they buy that they need to sell

      1Reply
    • Dan H.Pro Member
      Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
      11mo
      Quote from @James McGovern:

      @Joe S. 4k deposit. The agent forgot to include a clause in the offer that before they buy that they need to sell

       If you can prove that you requested the agent to put in this clause and agent did not, my view is the agent has some responsibility.

      However, you signed (or e-signed) the offer.  You had the opportunity to catch the error.   You also have some responsibility.

      I personally believe your responsibility is greater than the agent’s.   You should review the offer and confirm everything you want in the offer is present.

      I believe the broker should realize that the agent made an error that cost the client money and make an offer to compensate for some of the client’s lost Earnest Deposit (ED).  Hopefully you realize your role in this mistake and recognize it is not fair to expect the broker to make you whole.

      I once had 7 refi and one purchase close on the same day. I have used the same escrow on multiple purchases and refinances. On every purchase except this one they look at the OO check box and if not OO ask if there is current tenants and escrow the security deposit. This time they did not do it and we did not catch it. When the issue was pointed out shortly after the close, The escrow company tried to reach out to the seller for the money he rightfully owed but possibly legally did not owe. The seller refused to transfer the deposit. I possibly could have gone after the escrow company for a mistake, but the biggest mistake was mine to not catch the error (and maybe having 8 closings in a single day which I will never do again as I believe it heavily attributed to us not catching the error and 6 hours of signings is too much). We did not go after the escrow company because it was mostly our fault and learned a few lessons (thoroughly go through the documents, always check for security deposit transfer, and do not have 8 closes in a day).

      I provide this example to show ownership of my role in the issue and hope you see the similarities.

      Good luck

      2Reply
  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    11mo

    Why didn't the buyer review the terms of the agreement they signed?

    [email protected]
    2Reply
    • Frank Caulkin
      Member since 2025 · 20 posts · 17 votes
      11mo
      Quote from @Stuart Udis:

      Why didn't the buyer review the terms of the agreement they signed?


       I find only a handful of people read what they sign these days.

      1Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      11mo

        @Stuart Udis she is elderly 

      0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    11mo

    I will not sue, I would just ask for it back

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  • Ken M.
    Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
    11mo
    Quote from @James McGovern:

    A buyer agent made an error in judgment and caused the buyer to lose their deposit. Should the buyer sue the agent?

    Is the buyer literate? Can the buyer read and understand in the language the contract was written? Most judges will assume yes.

    It costs Easily $25,000 for a lawsuit and usually a year and a half or so. if the plaintiff wins,  they then have to figure out how to collect, it is not automatic. 

    If the buyer is literate, it is unlikely they will win in court.

    This calls for a conversation with the agent's broker who has responsibility to settle these disputes.


    0Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      10mo

      @Ken M. The agent broker has been unresponsive 

      0Reply
    • Ken M.
      Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
      10mo
      Quote from @James McGovern:

      @Ken M. The agent broker has been unresponsive 

      Well then, you bump up to the next level. It isn't brain surgery. Talk to the liaison person at the https://www.ctrealtors.com/ (Connecticut REALTORS® (CTR) is Connecticut's largest professional trade Association.) Any broker with half a brain will respond to the people who can sanction them.
      0Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      10mo

      @Ken M. The broker is with EXP. I could not figure out who is above the broker 

      0Reply
    • Ken M.
      Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
      10mo
      Quote from @James McGovern:

      @Ken M. The broker is with EXP. I could not figure out who is above the broker 

      I did, and it's the link right above your post.
      0Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      10mo

      @James McGovern the creators link was not of value. They will slap his hand but nothing more

      0Reply
    • Ken M.
      Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
      10mo
      Quote from @James McGovern:

      @James McGovern the creators link was not of value. They will slap his hand but nothing more

      Your comment "4k deposit. The agent forgot to include a clause in the offer that before they buy that they need to sell"

      Okay, so sue. $25,000 to possibly collect $4,000 doesn't sound exciting to me.

      The only other options are small claims court and the Attorney General. Knock 'em out."

      0Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      10mo

      @Ken M. The Connecticut attorney general is a no talent assclown and not worthy of contacting 

      0Reply
    • Ken M.
      Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
      10mo
      Quote from @James McGovern:

      @Ken M. The Connecticut attorney general is a no talent assclown and not worthy of contacting 

      Okay :-)
      0Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      10mo

      @Ken M. Looking for alternatives other than courts and lawyers. Would love radical ideas for this agent to feel the pain personally that he caused his buyer 

      0Reply
  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    10mo

    Share the contract. Show us the receipts. What is the property address? I don’t believe any of it lol. 

    2Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    10mo

    It will be very tough to sue over a $4k deposit. You will spend more in lawyer fees than the amount. Suing the agent or broker, that may or may not even have enough net worth to carry on a lawsuit is also something to consider.. 

    Maybe you can take it to a small claims court or report to the regulatory authority for the licensee in the state? I think they will hurt more if their license is suspended.. And likely will need to pay it back anyway to be active again. 

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    • Steve K.
      Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
      10mo
      Quote from @Erik Estrada:

      It will be very tough to sue over a $4k deposit. You will spend more in lawyer fees than the amount. Suing the agent or broker, that may or may not even have enough net worth to carry on a lawsuit is also something to consider.. 

      Maybe you can take it to a small claims court or report to the regulatory authority for the licensee in the state? I think they will hurt more if their license is suspended.. And likely will need to pay it back anyway to be active again. 

      I think the OP is the seller who supposedly gets to keep the $4k deposit, and he just wants to further punish the buyer’s agent who he blames for the mistake. Thats the way I’m reading it anyway. OP is that correct? Also assuming this is a FSBO situation? 
      0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    10mo

    Try to be amicable and split it 50/50.

    0Reply
  • Michael Murphy
    Investor · Buffalo · Member since 2025 · 45 posts · 27 votes
    10mo

    If it's bothering you that much you could always go down to his office and straighten him out in person.  

    Just make sure you have adequate funds to cover bail.

    1Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      10mo

      @Michael Murphy the agent lives on the other side of the state. I want to throw him under the bus remotely 

      0Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    10mo

    80% of all agents are part-time and don't know what they are doing, on top of that many of them are idiots. I know that because I have to deal with them every day.

    But your agents also deserve some blame @James McGovern for not catching that in the pre-approval letter. Or calling the loan officer for a little chat. That's a rookie mistake. If you were selling it FSBO, then you know who to blame.

    However, I understand the urge to put a spotlight on the buyer's agent, who got his client in trouble. I've been there many times (in my mind) - but it won't fix anything. This is an equal opportunity industry: agents of all skill levels have almost equal opportunities to represent clients. That's why the 80% part-timers are still here.. would love to see that more restricted.

    You have two choices: return EM and find a new buyer. At least rates have moved in your favor. Or stick with your buyer, evaluate their listing and work it out with them.

    1Reply
    • James McGovern
      OP
      Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
      10mo

      @Marcus Auerbach I will keep the EMD for that seems like the fastest and most efficient way to throw the buyer agent under the bus

      0Reply
    • Marcus Auerbach
      Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
      10mo
      Quote from @James McGovern:

      @Marcus Auerbach I will keep the EMD for that seems like the fastest and most efficient way to throw the buyer agent under the bus

      I don't know if you are in a position to decide that. In Wisconsin it takes the buyer's and seller's signature to agree what happens to the EMD. The seller can not unilaterally decide to do that. If you guys don't agree, you can litigate it out, which is financially irrational and cost prohibitive.

      You are mad, I get it, but don't let your emotions dictate your strategy. Do what's smart.

      0Reply
  • James McGovern
    OP
    Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes
    10mo

    The agent name is Cornelius Howard out of Stamford Connecticut 

    0Reply
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