The biggest mistake a real estate agent can make is failing to disclose material facts about a property or transaction. This violation of legal, ethical, and fiduciary duties can result in license revocation, lawsuits, financial penalties, and permanent damage to professional reputation.
Material facts include any information that could influence a buyer’s decision or the property’s value such as structural defects, environmental hazards (e.g., mold, lead paint, or earthquake risk), zoning issues, pending litigation, or neighborhood nuisances. In many states, including California and Florida, agents are legally required to disclose known defects, even if the seller is silent.
Other serious but secondary mistakes include:
- Dual agency without full disclosure and consent, which creates conflicts of interest
- Misrepresenting property details (e.g., square footage, zoning, or school districts)
- Practicing without an active license or broker sponsorship
- Violating fair housing laws through discriminatory language or actions
- Poor communication that leads to missed deadlines or client dissatisfaction
However, nondisclosure stands out because it breaches the core ethical obligation of honesty and can expose agents to civil liability and disciplinary action by state real estate commissions. Even innocent omissions such as failing to report a leak the seller mentioned casually can be deemed negligent.
To avoid this critical error, agents should:
- Conduct thorough visual inspections
- Encourage professional third party reports (e.g., home inspections)
- Document all known issues in writing
- Err on the side of over disclosure
Certilyst reinforces ethical and legal standards in its real estate exam preparation, ensuring candidates understand disclosure requirements, agency law, and risk management before entering the field. Prepare with confidence at Certilyst Real Estate License Prep.
For official guidance, refer to your state’s real estate commission or the National Association of Realtors Code of Ethics: www.nar.realtor.