Home Buying in 92651>Question Details

Mr. Blue, Home Buyer in Laguna Beach, CA

Negligence Claims from Underwater Buyers?

Asked by Mr. Blue, Laguna Beach, CA Mon Jun 1, 2009

Has anyone heard of any Laguna Beach agents facing legal claims from former clients because the clients paid too much for a particular house, are now underwater, and now blame that on the negligent representation of the agent?

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13
Mr. Blue,
Hi!
I have been a Realtor in Laguna Beach for many years.
In general, as we know, Real estate is local in nature & cyclical!
Take Laguna Beach, CA, for instance.
There are areas such as Emerald Bay which have increased in value and then there areas such as Arch Beach Heights which have declined.
Laguna Beach, unlike many communities, is an artist village consisting of homes which are not "cookie cutter"!
Because of this factor, one cannot use price per square foot solely to gauge value!
Laguna Beach across the board is holding its value!
Matter of fact, we had multiple bids recently on a $22M listing.
I have not heard of any lawsuits!
Anyone can sue, for any reason, but it does not mean their argument is valid or justified!
The trophy communities such as Newport Coast, Corona Del Mar, Laguna Beach, Rancho Santa Fe, La Jolla and the like are historically the best areas to purchase for long term value investing!
I personally pride myself in representing my buyers and sellers with properties which have maintained and accelerated in value.
A cycle has four phases (if not influenced by an outside source): The Peak (Top) - The Contraction or Slump (Recession) - The Bottom (Trough) - The Recovery (Expansion or Boom)
We are currently, as we all know, are in the Trough stage. This is evidenced by a fall in output and employment.
I personally believe we have another 18-30 months to go.
Having said that, we are & will be witnessing many excellent buying opportunities in the near future.
From 1998-2008 there were many predatory people who should not have been practicing real estate or lending! Many of those people have found other professions!
If someone is misrepresenting or has misrepresented the facts, they definitely should be held accountable!
Every day I receive at least 2-5 phone calls from people who need help!
My objective is to assist as many people as I can!
Steven Abraham
Prudential CA Realty
Laguna Beach, CA
949.378.4005 Cell
lagunacastles@cox.net
http://www.stevenabraham.com
2 votes Thank Flag Link Tue Jun 2, 2009
As if the agent has control of the market? This has happened everywhere. Anyone who bought within the past 2 years, if they have to sell now, will not be able to sell for the price they paid. It's very unfortunate and very sad times for many people. I'd like to know if the tables were turned and they profited significantly because the market increased, would they be thanking their agent and sharing their profit? I think you know the answer to that.
2 votes Thank Flag Link Tue Jun 2, 2009
Mr. Blue,
Just a few points regarding your response below.
An agent, broker, and or Realtor should never advise and very few Seasoned agents will!
Secondly, only God knows for sure where the market is going, but we all realize the current economic condition.
In this current cycle, cash is king!
In my opinion, the Fed. allowed and introduced products to the market which tempted many to borrow themselves rich!
This principle very seldom works!
Many who purchased shouldn't have.
Many who used their homes as ATM machines shouldn't have.
Many who abused their credit cards and borrowing power shouldn't have. The list goes on....
You made reference to secrets. I am not sure what you mean, for there are no secrets.
A Seasoned agent should and will disclose, disclose, & disclose.
It sounds to me that you purchased a property, you are upside down & you are blaming your agent.
Is this the case?
If so, you may have options.
Laguna Beach is a vacation destination as we all know.
It may be possible to furnish your property and attempt to rent it out weekly or monthly.
Just a thought!
Keep in mind, a vacation rental must be approved by the City of Laguna Beach.
Arch Beach Heights and South Laguna offer a potential buyer, who can afford it, an opportunity to purchase and live in Laguna Beach for a little less in some cases depending upon property condition, location, etc.
Bottom line: There are no guarantees & purchase only what you can afford and continue to maintain.
I hope this helps!
The above is not offered as advice and is only a professional personal opinion.
1 vote Thank Flag Link Thu Jun 4, 2009
Pragmatist, you and your band of cronies are merely being argumentitive, making ridiculous statements with absolutely nothing to back them up - besides your gut feelings. No one has suggested that prices are going up anytime soon, so stop trying to twist things out of context just to feed your negative agenda. I humbly suggest you pack up your shtick, and head off to Zillow - there's a veritable festoon of your cronies over there.
Web Reference: http://BobPhillips.net
1 vote Thank Flag Link Wed Jun 3, 2009
I haven't heard of this situation. Agents may help an owner set an asking price, but the property usually has to be appraised by licensed appraiser for a bank loan prior to the sale closing.It is a tough time for so many who bought when the market was up and those owners may have to wait to ride out the down market.
1 vote Thank Flag Link Tue Jun 2, 2009
Hi,

I have not heard of this....but I know it's natural to want to blame someone when things go wrong. If there was fraud and/or misrepresentation then certainly it's fair to explore damages on that basis, but if it's just buying at the wrong time, I don't see any liability for an agent.

It's too bad so many people are in such a tough situation.

Karen
1 vote Thank Flag Link Tue Jun 2, 2009
Mr. Blue? The consensus answer to your original question is a resounding NO.
0 votes Thank Flag Link Thu Jun 11, 2009
Agents provide information to buyers all the time. Supposed "comps" for example. Few agents if any provide other market data that shows the market declining. That's not advice, that's information.
0 votes Thank Flag Link Thu Jun 11, 2009
Mr. Blue, I disagree with you completely.

I thought that would be apparent to anyone, by now. The answers you sought cannot be obtained in this forum. You know that. Your posting of the question - while appearing innocent a few days ago, has - as I stated below - been "outed" as the feeble attempt to be argumentative, that it is.

Don't bother calling ME to look for properties - if that day ever occurs - I'm FAR too busy working with clients who appreciate my hard work on their behalf.

Have a good life, Sir.
Web Reference: http://BobPhillips.net
0 votes Thank Flag Link Thu Jun 4, 2009
I will take that last post as "Yes, Mr. Blue, your last post must make sense because I can't seem to find any reasonable counterpoints in my response."
0 votes Thank Flag Link Wed Jun 3, 2009
Mr. Blue, it is quite obvious, in retrospect, that your posting of this question - along with your taunts and complaints of Realtors in this and adjoining threads - that this post was simply a thinly disguised attempt to provide argumentative fodder for you, and your wife, Pragmatist, with local Realtors. ( Cute touch, by the way - awarding her a "Best answer" when it wasn't really an answer at all. Kind of interesting that the two of you just happened to show up on this site on the same day. )

Funny how these things always become clearer with the passage of of few days - and a few additional posts.
Web Reference: http://BobPhillips.net
0 votes Thank Flag Link Wed Jun 3, 2009
It may make sense for a buyer to blame a buyer's agent for the failure to advise the buyer that the market is strongly moving downward. That means you lose your downpayment equity in a year. That means the buyer can't resell. That leads to a lot of bad things. This is what can happen when an agent keeps secrets from the client. The name of the game for most buyer's agents is to try to say nothing that will disrupt the signing of the offer and the close of escrow.....I just wonder how long it will be until the lawsuit start en mass.
0 votes Thank Flag Link Wed Jun 3, 2009
This is probably not a risk for the average agent. However, those agent's who promoted purchasing real estate as an investment may see some issues, particularly if they marketed their services in an investment adviser capacity. In any case, it would be a stupid lawsuit... but as a state, we're known for stupid lawsuits.
0 votes Thank Flag Link Wed Jun 3, 2009
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