Editorials don't come with guarantees, but if you and your agents will follow the advice outlined by Arizona attorney and risk management consultant Robert Bass, you can significantly reduce your liability exposure.

Why? Because Bass, a leading judge and broker defense counsel has defended brokers in law suits for over twenty year and knows exactly which actions and lack of actions are the likeliest to get you sued.

"Eighty percent of law suits against brokers are brought by buyers," says Bass. "And two-thirds of those have to do with the condition of the property."

So today's buyer is tomorrow's plaintiff? "Exactly, says Bass, a broker's defender. "I tell people they must insist on professional inspections."

Explains Bass, "Thirty-year-old houses aren't new, but buyers want them to be perfect. It can't hurt for sellers to get inspections. Listing agents should explain the value of inspections."

Buyers from hell are Bass's stock in trade, but that's why he holds many in contempt. "Some buyers think they are entitled to a perfect house when they won't commit to paying a dime. Then, if something happens that they don't like, they get a free ride. They can use you, abuse you and buy through someone else," says Bass.

You have to cut your exposure, says Bass. If a buyer waives an inspection, the agent needs to present them with a form and make them sign it, so that they have acknowledged in writing that you advised them to get an inspection and they chose not to. Many suits would be avoided if Realtors would take this one step.

You have to practice defensive real estate. Bass defends many Realtors who believed that they got their buyer the best deal possible, but they were sued anyway. "Expecting the world to treat you right because you're a good Realtor is like expecting a shark not to eat you because you're a vegetarian," laughs Bass.

So what can you look out for?

Condition of the house - Depending on where you live, your risk will be higher on some materials and mechanics than others. In the South, roofs are a greater problem. In the north, heating and fresh air exchange systems get more wear. The buyer's inspection should cover all systems including plumbing and electrical wiring. Check slab foundations for cracking and settling.

Claims of misrepresentation - Buyers love to nail Realtors for failure to disclose things like aspects of the property that aren't apparent. Again, you can nail this shingle down before the roof blows off by informing in writing, that this home in Holiday Farms Estates was built on or among farmland and that the area may at times smell like a farm, or that this home is close to the airport, and airplanes will often fly overhead. Don't assume that verbal disclosure is enough. Make them sign an acknowledgment of these property conditions to release you from liability.

Agency Disclosures - Agency disclosure isn't always required, but most brokers require a form to be signed so that the parties understand representation issues. If you are an agent, you owe a higher duty than as a dual agent.

As a limited dual representative, you need to inform both parties that there are things you can do and things you can't do. Where dual representation can be dangerous is if the buyer comes to believe that s/he paid too much for the house.

"I rarely see a lawsuit for which count one is breach of a dual agency duty. They aren't suing over dual agency, they're suing because the house has termites," says Bass.

Do's and Don'ts

1. Don't suggest a priceHe warns that appraisers can come in at different values, and that is one area where an agent should be careful. "Make sure you recommend that they get independent counsel in writing," insists Bass.

2. Don't measure the house. Make the buyer measure the house. You hold the dumb end of the tape measure. Get a copy of their figures for their file and your file. Write down that all square footage figures are approximate, and that the buyer must verify the footage for himself/herself.

3. Don't practice law. Don't answer legal questions; refer the client to an attorney.

4. Don't answer technical questions about the property. Does that pier look sturdy? How old is the wiring in this house? Does the roof leak? Let the appropriate professionals answer those questions.

5. Don't make representations. The best way to avoid misrepresentations is to make no representation. That means don't make decisions for your clients. Ask what you want the client to have you do, instead of suggesting what they should do. If they ask, tell them that you can show them the data, but the decision has to be theirs.

6. Don't be fooled. Don't accept any excuse why a buyer is not going to get an inspection. "My brother-in-law is a contractor; I'll have him look at it," is a statement that doesn't absolve the Realtor from liability. You can respond with, "I admire your courage, cause if something breaks I'm not responsible the condition of the property. Not many buyers are willing to sue their brother-in-laws.

7. Do recommend home warranties to sellers and buyers. Sellers benefit by offering a perk to buyers and by giving the buyer the warrantor's number to call should a mechanical failure take place. Most home warranties cover plumbing systems and all built-ins. Buyers benefit because it reduces their risk exposure when buying an older home. Both buyer and seller defer responsibility to the third-party - the home warrantor.

8. Don't feel you have to help everyone "I can't tell you how many times a broker or an agent have told me, "I had a funny feeling about that guy from the start," he marvels. "Yet, they go ahead and try to help them anyway."

If you get a bad feeling, its Okay to fire a client. What are the tip-offs that a buyer is going to be trouble? They are the ones who expect you to do everything - they are high maintenance complainers, whiners, and they evade responsibility for their actions. If you tell them they should be at the walk-through, and they say we want you to do that for us - say no. Tell them you might miss something, and that they need to rely on their own eyes and ears.

"It should be apparent that risk reduction really equals professionalism," concludes Bass. "It's about giving higher quality service to your clients."

It is about professionalism.

Editor's note: Robert Bass can be contacted at robert@basslawfirm.com.