From the NY Times:
Feeling Misled on Home Price, Buyers Are Suing Their Agent
Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom.
What makes Ms. Ummel different is that she is suing her agent, saying it was all his fault.
Ms. Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.
Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase.
“When your house appreciates $100,000 in the first six months, you’re not quite as concerned that maybe the valuation was $25,000 or $50,000 off,” said Clifford Horner of the law firm Horner & Singer. “But when your house goes down, you ask: ‘Who might have led me astray here?’ ”
Agents representing buyers rarely had the opportunity to make mistakes during the last real estate boom, in the late 1980s, because the job hardly existed then. For decades, residential transactions almost always involved brokers who, whatever assistance they gave the buyer, legally represented only the seller.
The long boom that began in the late 1990s put an end to that one-sided world. As prices spiked, buyer’s agents and brokers became popular as sounding boards, advisers and negotiators. The National Association of Realtors estimates they are now involved in two-thirds of all residential purchases.
That makes this the first housing collapse in which large numbers of buyers had a real estate professional explicitly looking after their interests. The Ummel case poses the question: In a relationship built on trust, where promises are rarely written down and where — as in this case — there is no signed contract, what are the exact obligations of these representatives in guiding their clients through a sizzling market?
“Agents have a lot of fiduciary duties, but they don’t make money unless they close the sale,” said Joel Ruben, a real estate lawyer in Manhattan Beach, Calif. “In an inflated market, there are built-in temptations to cut corners.”
Typical home buying sheeple.
If it doubles in price: “Look everyone: I’m a real estate genius.”
If it falls in price: “It’s the agent’s fault!”
Look, I don’t mind the sewage, I have to tell you. I liked the soap operas when I was younger. I DO mind if the activity raises insurance rates for an entire class of workers or industry going forward.
But these things need to be class actions, I’d say. If they’re going after the fiduciary aspect from the insurance company, wouldn’t they have to prove the fiduciary was imprudent? This would mean that an entire group of people, maybe everyone the agent sold homes to, was affected.
NJpatient?
Let’s sue Car dealership salesmen as well……
lawyers will love it….
This is silly.
I’ve never met an agent that promised me any sort of gain on a RE transaction. They just stick to the comps, the comps, the comps.
And plus, everything they do say in this vein, is verbal.
i don’t totally agree – i think that we have to re-look at the concept of puffery.
if your broker at merrill says it’s a great time to buy, or stocks never go down etc. that’s not considered puffery.
the amount of money involved in these transactions is enormous, and magnified based on leverage. as we see, the potential for financial destruction is very high – the paper work is complicated, and it’s basically a once in a lifetime transaction, so everything is new to the buyer. i think that agents have to be held to a higher standard – they hold themselves out as trusted advisors, and they make a ton of money on a transaction –
this whole bubble was fueled by lies and misrepresentation, and stupidity at all levels, i think that regulators should look at all these levels, and make adjustments to the system so that it does not happen again.
Silly indeed. What kind of morons buy a house on nothing but an agent’s say-so on what it’s worth? It was one thing ten years ago when comps were hard to come by, but today there’s no excuse for buyers not to educate themselves — and no excuse to buy just because an agent tells you to. Unless the agent told them point blank that the house would never, ever depreciate, the buyer has no gripes here.
The first agent we worked with 11 years ago wrote our offer for a house, saying she thought it was a good opening offer. We anticipated negotiating, and were willing to go a bit higher. Another buyer came in at asking price, and all of a sudden the agent was calling me at 11:00 at night, screaming at me that we bid too low, that she would never, ever, be able to find us a better house than that one at our price. Did that mean we were wrong? No, it meant our agent was a f****** wackjob who screams at her own customer. Needless to say, we “fired” her, waited another year to save more money, and worked with another agent.
Postscript: After she got the letter that I felt she was used to working with more affluent buyers than we were and that it would be beneficial for both of us to not work together, she called me…at work…while I was doing a demo for a client…crying about how she’d never, ever, ever received a letter like this and how terrible I was. And she would not get off the phone. I hung up on her.
I have no idea if she’s still in the business.
There’s an intersting angle to these sort of cases. In any case of professional malpractice (what these claims amount to) the plaintiff has to present an expert witness to testify what the standard of care is in the industry, so they can show how the defendant failed to meet it. Setting aside the jokes that there is no standard of care and a used house salesman is only out for themselves, true as it may be, those experts are… other agents. They are, of course, paid experts. This means a new line of work for a few down-on-thier-luck Realtwhores(TM) as expert witnesses.
Long-time reader, first-time poster here. All I can say is…
ARE YOU F#@KING KIDDING ME?!?!?!?!?!
This woman’s a total dumb a#&!!!
She’s already spent $75K in lawyer fees to recover exactly what???
If she overpaid for the house by $100K….she will be lucky to break even.
On a purchase of this size, the buyer should do some basic research into the market area. Did she just walk into the RE office and buy the first house she looked at??
Ok here is the deal..
Now what happens if Mrs Marty Ummels lawyer looses the case and on top of it, and I hand hand her a flyer with a discount Lawyer that would charged her $25 thousand less??? in legal fees ? You can bet she would sue the first Lawyer……….
Well Mrs Ummel here is the Lawyer I would recommend to you, now this guy is a real winner !!! he is the lawyer for you, see him in action right here and now.->
http://youtube.com/watch?v=25eCZVhBQPc
by Joe Justice