Under which circumstance might a real estate agent be found liable for misrepresentation?

A real estate agent may be found liable for misrepresentation when they fail to disclose known defects in a property. This obligation is rooted in the duty of agents to act in the best interests of their clients and adhere to ethical standards. When a real estate agent is aware of significant issues or defects that could affect a buyer's decision to purchase the property and does not disclose this information, it can be considered misleading and can lead to legal consequences.

In the context of real estate transactions, transparency is crucial. Buyers depend on agents to provide them with complete and accurate information about a property. If an agent conceals defects, it not only compromises the buyer’s ability to make an informed choice, but it also exposes the agent to liability claims. This is especially relevant in Texas, where real estate practices emphasize full disclosure and protection against misrepresentation.

On the other hand, providing accurate market analysis or suggesting clients set their prices strategically does not inherently involve misrepresentation. Similarly, representing both buyer and seller, while it entails certain ethical considerations, does not automatically lead to liability for misrepresentation, as long as the agent maintains honesty and transparency throughout the transaction.