Seller Credits? Write it down!

This case examines a scenario in which a real estate licensee representing a buyer in a residential real estate transaction failed to adequately document the purpose, terms, and amount of a credit that was given to the buyer by the seller. When a real estate licensee is engaged in a sales transaction in which the seller offers a credit to cover agreed upon expenses, the licensee has a duty to properly document in writing the purpose, terms, and amount of that credit.

 

The Situation:

 

On September 1, 2019, Amy Loiseau was issued a real estate salesperson’s license.

 

On April 21, 2024, Elizabeth Severn entered into a buyer agency agreement with Loiseau.

 

On May 4, 2024, Loiseau submitted an offer on Severn’s behalf to purchase the property located at 456 West Main Street, Front Royal, Virginia. The offer included a home inspection contingency addendum.

 

On July 9, 2024, the Board received a written complaint from Elizabeth Severn regarding Agent Amy Loiseau.

 

The Investigation:

 

In April 2024, Loiseau entered into a buyer agency agreement with Severn. In May 2024, Loiseau submitted an offer on Severn’s behalf to purchase the property located at 456 West Main Street, Front Royal, Virginia. The offer included a home inspection contingency. The seller soon thereafter accepted the offer.

 

In May 2024, a home inspection of the property located at 456 West Main Street was conducted. The inspection found that a handrail on the exterior was substantially damaged, the dishwasher was leaking, a component of the oven was not functioning properly, and there was evidence of termites and other wood destroying insects in the crawl space of the property.

 

Loiseau sent a repair addendum to the seller’s listing agent requesting that the deficiencies found in the home inspection report be remedied.

 

At the final walkthrough, Loiseau and Severn found that while the crawl space had been treated for wood-destroying insects, but the other items on the repair addendum had not been remedied.  Rather than delay closing, the seller offered a credit. At closing the buyer received a credit of $1,500.

 

Written communications indicate that Severn had been considering credit amounts of $1,000 and later $2,000 but was not aware how or when the amount of $1,500 was determined. There is no written record, and the buyer was not aware, which deficiencies the $1,500 credit was meant to address.

 

The Result:

 

Loiseau was found to have violated section 54.1-2132 of the Code of Virginia which requires real estate licensees representing buyers to exercise ordinary care and promote the interests of their client. The Board found that Loiseau’s failure to properly document and memorialize in writing the purpose, terms, and amount of seller credit constituted a breach of these statutory obligations. Loiseau was fined $550.00, had her license placed on probation for six months, and was required to complete at least three classroom hours of Board-approved continuing education in Agency law within six months.

 

Published May 2025