How might this scenario impact real estate agents?
Currently, homeowners facing Chinese drywall issues have brought suits against manufacturers and insurance agents, but the real estate industry has largely avoided these types of claims. However, as more homes with Chinese drywall fall into foreclosure or are unloaded on to the market via short sales, agencies that knowingly sell the homes to unsuspecting buyers may face a greater risk of E&O insurance lawsuits.
A factor that may complicate the matter is that many of the homes with Chinese drywall may be underreported by buyers who purchased the homes with the intention of flipping them or selling them at a discount. The article also noted that some homes are being sold “as is,” without an inspection to prove whether or not Chinese drywall exists. As few industry professionals have an accurate number about how many of these homes may exist, it increases the likelihood for lawsuits from homeowners who feel their agents withheld key information during the buying process.
“I suspect that there’s probably at least 100 percent more that not been reported; either the owners left the homes, or the homes are being put back on the market through foreclosure and short sale and being sold once again to unsuspecting homeowners,” homeowner Rich Kampf told the newspaper.
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