Skip to main content

Market Slow Down? Blame your Agent!!!

Who takes the blame when a buyer over-pays for a property? That question is about to be answered in a North County, California courtroom.

It seems that disgruntled Buyer Marty Ummel thinks that she over-paid for her new home, perhaps as much as $100,000 too much. How upset did that make her? Upset enough to have sued her real estate agent, her mortgage broker and the mortgage company's appraiser. The claim seems to be that they (the professionals knew she was overpaying, but withheld information from her so as not to "lose the deal." The appraiser and mortgage broker have already "settled out" but the case against the agent will be presented in court next week.

Its easy to write this one off as another case of someone refusing to accept personal responsibility for a mistake or for a bad decision. Blaming the other guy it seems is the "american way."

The buyer may have taken guidance from the agent and placed misplaced reliance on the appraisal, but shouldn't she have done some due dilligence of her own? With web services such as Zillow.com and Trulia.com its pretty easy to check what other properties in any given neighborhood are selling for. Local newspapers carry this information too. According to the defendant's expert consultant, that seems to be the point. "They (Ummell) simply didn't do what is expected of a knowledgable, sophisticated buyer."

Should she have used such facilities to make sure she wasn't over-paying? I would have expected as much, but not everyone is that sophisticated. It would be wrong to hold every home buyer to that type of standard.

On the other hand, if you hire a professional to represent you in a transaction, particularly one that involves hundreds of thousands of dollars, wouldn't you expect that professional to have some loyalty to you? I cannot say at this point whether or not the agent actually knew of adverse information. Until then, all we can do is rely on his assessment of the case: "The lady's a nut job. I didn't do anything wrong."

I suspect that the answer is going to lie somewhere between the two extremes on this one. If the agent really was hired as a buyer's representative, and if the agent knew adverse information, he should have spoken up. We'll all find out soon enough.

Source: The New York Times, David Streitfeld (01/22/08)

Comments

Anonymous said…
To use a realtor or not to use a realtor when you are going to sell or to buy property? It depends... Last year I sold my house rather successfully without a realtor with the help of FSBO website Fizber
January 30, 2008 at 7:03 AM
Post a Comment

Popular posts from this blog

PLM Title Shuttered

Title insurance is a critically important part of any real estate transaction; or at least it should be. The title company guaranties the "quality" of an owners interest in the property - that there aren't any (unknown) liens or defects. No buyer that I work for will purchase a property without it. Title insurance is only as good as the insurer. We want to know that the insurance company, like the Rock of Gibraltar , will always be there. We want to sleep easy at night, knowing that the client is protected. That said, it was a bit distressing to see that PLM Title Company shut its doors, without any forewarning last week. Worse still, this morning's news is that there is a criminal investigation underway - and that we do not yet know why. Old timers like me shudder with memories of the great Intercounty Title debacle five years ago. Here's to hoping that this one is nothing like that one. Set aside the problems involved trying to make a claim against a defun
6 comments
Read more

FHA Loans and Condo Sales - Is Relief on the Way?

By all outward appearances, state government in Illinois has ground to a complete halt, with all eyes focused on the Governor's "problem" and all the related fal - der -rah. Its hardly business as usual in Springfield, but not everything has ground to a halt. Several new bills have been introduced this week. That is not to say that they will be of benefit to we the people. Nonetheless, the cogs and gears are turning, and we are hoping for the best. One such proposal comes from Rep. LaShawn Ford of Chicago's west side, who is himself a real estate broker and entrepreneur . He is the author of House Bill 155 , introduced & referred to the Rules Committee Wednesday. It seeks to address one of the most common problems I am seeing in condominium resale transactions these days; the tension between many Declarations of Condominium and FHA loan guidelines. Many Condo Declarations provide Associations with a "right of first refusal," which basically allows t
3 comments
Read more

MAYOR DALEY PROPOSES TIF FINANCING FOR SOME DISTRESSED PROPERTIES

Lets see how City Council reacts on this one, but the Mayor introduced a pretty interesting little ordinance that might be a real boon to first time area home buyers willing to buy and rehabilitate some bank-owned properties. Progress Illinois reports that the mayor's bill, introduced on March 9: "seeks to tackle the growing problem of vacant homes that are blighting neighborhoods across Chicago, and in particular in minority communities. Called the Vacant Building TIF Purchase and Rehabilitation Ordinance, the  bill  (PDF) proposes allowing residents with a household income no greater than 100 percent of the regional median income to apply for a tax increment financing (TIF) grant that would pay for up to 25 percent of the cost of purchasing and rehabilitating an empty residential property. Single-family empty homes or units in condo and cooperative buildings with four units or fewer are eligible. The empty homes must be located in a TIF district and must be in need of
Post a Comment
Read more