Agent Gets Sued by Buyer After Home Loses Value
I am not a Real Estate Agent and I certainly don’t play one on T.V. But this piece of news coming out of California caught my attention:
CARLSBAD, Calif. — Marty Ummel believes she paid too much for her house. So do millions of other people who bought at the peak of the housing boom.
What makes Ummel different is that she is suing her agent, saying it was all his fault.
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
Read the full story and tell me what you think. If this couple wins this lawsuit it could be the RE communities worst nightmare? I hope agents didn’t spend all the money they made in the boom, because things could get nasty.
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This article published on Tuesday, January 22nd, 2008 at 6:55 pm | Contact the editor
Topics: Real Estate, Realtors
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Writer for national real estate opinion column AgentGenius.com, focusing on the improvement of the real estate industry by educating peers about technology, real estate legislation, ethics, practices and brokerage with the end result being that consumers have a better experience.
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Ah, what the desperate will do. I guess lawyers don’t have to chase ambulances anymore.
I think the burden of proof would be very high, so I doubt anything will come of the suit. However, there is more to this than just the outcome of this lawsuit. People are going to start to realize that professional appraisals are something to value even if you aren’t required to get one. We will likely see more purchase agreements contingent upon a satisfactory appraisal paid for and requested by the buyer.
The agent blew it.
…but the LENDER made the loan…it MUST have been worth it.
We never have all the facts and I know many agents that should be sued – we owe it to the customer to disclose everything about the market and its trends.
Brian, as you probably know, the agent was the lender. When the buyer finally got her hands on the appraisal, she saw the comps and the next question was “how did this loan get approved?”. I’m betting at least one loan fraud investigator will be sitting in the courtroom next week.
“That makes this the first housing collapse in which large numbers of buyers had a real estate professional explicitly looking after their interests.”
That is the kicker thought from that article. Gonna be a very interesting lawsuit to follow.
be sure to go over to redfin and reads Glenn’s spin on it.
Rather than entering suit against the agent, she should probably be entering suit against the appraiser. Of course the agent and brokerage will have deeper pockets than the appraiser.
This now opens the even larger question of how many consumers are going to be entering suits against Zillow for the inaccurate information they provide on a daily basis?
Mack, if the agent/lender had given her the appraisal when she asked for it, she would have seen two comps 5% and 10% less and backed out. She had a right to the information and was denied.
Bob, I didn’t see in the article that she had requested a copy of the appraisal but was denied. I agree with you that she should have been given a copy of the appraisal when she requested it.
As a REALTOR and a Loan Officer I make it a practice to get a copy of the appraisal to my clients as soon as it completed. We then review it to make certain there are no questions.
By withholding information from the buyer the agent in question deserves to be spanked.
I don’t think realtors should be loan officers and I believe holdheartedly that loan officers tend to make poor realtors. Micheal Douglass’ character in “WallStreet” said, Greed is good. But at what cost? Walmart’s greed destroys entire neighborhoods before, during, and after their tenure in their choosen “hood”. But we all shop there. Yesterday, I went to the movies, and their were over 20 movies playing in one theater, all operated by teenagers, what are we teaching them?. The manager, whom appeared older, stated he was in college working on a business management degree. My point is this, this destruction of sorts, is not sneaking up on us. It’s right out front….yet we do nothing and bitch when things don’t go our way. The buyer here knew their loan and the purchase of the property was being handled by the same person. Short of full disclosure, the buyer still pursued the transaction. Would the buyer’s reaction have been the same if the property soared in value but not to their expectation…..Both the buyer and the agent/lender got greedy….They both violated the Gambler’s Creed…You got to know when to hold’em, know when to fold’em but most importantly, you got to know when to walk away and know when to run. I think the agent/lender should be force to give his commission to gambler’s annombus and buyer should be giving the Kenney Roger’s “Gambler’s Creed” DVD.
I just read an article that said the agent was found “Not Guilty”. http://www.nctimes.com/articles/2008/04/11/business/589b9e7009198e1c88257427006b6fd3.txt