Overstatements, or puffing, is when an agent promotes an overly optimistic future for a property, or exaggerates the material facts of a property with the intent of making a principal believe a false narrative. Selling a property and its potential is part of the job, but an agent’s statements should remain realistic and grounded in fact. For example, an agent employs puffing when he or she says that a property can be converted into a massive auditorium without the proper permits.
Recovery Account and Puffing
Whether the action was fraud or negligence, the agent may be held civilly liable. Making overstatements or simplifications, called puffing, is another way agents can be held liable. Victims of fraud may be entitled to a portion of their loss resulting from the unlawful acts of the agent through the recovery account. The recovery account is a fund that is partially financed through state licensing fees to help victims of real estate fraud resulting from misrepresentation, false statements, and other negligent actions that affect the damaged party.
