10.29 Misrepresentation of Buyer Qualification

Company policy is to never misrepresent the qualification of a buyer. This situation would be where a licensee represents to a seller that the buyer is a pre-qualified buyer and is going to obtain new financing when the buyer is actually not pre-qualified and the agent does not know if his buyer can or cannot obtain a loan. If the seller accepts an offer relying upon these false representations and takes the property off the market and then later is confronted with the buyer’s lack of ability to obtain a loan, the seller would have a justifiable suit for damages based upon the misrepresentation of the licensee. Licensees should always confirm the pre-qualification by a lender prior to making any representations about the financial ability of the buyer to perform.