To all that replied .....thanks !!! Just to let everyone know --- the seller had refused to return the deposit on the house in this case.... and refused to recind the contract. The realtor also did some unethical things too, even as far as claiming that he informed me there was a mistake in the listing ... prior to contract . In fact .... it was the home inspector that informed me that it was only a "legal" 3 bedroom home.

After 3 attempts at requesting for a refund and after the threat of suit of breach of contract by the seller and his attorney ---- I paid a retainer fee and my attorney filed a suit against the seller, the agent, and the broker for fraud. After three days the seller agreed to return my deposit and recind the contract.

Anthony,
There was a listing agent involved and not just a discount brokerage that for a flat fee took the information that the seller provided and put it in the MLS without verifying it? So I am guessing that the room is either not up to code or a renovation where they did not pull permits. We are not attorney's first off so take what I say with that in mind. You certainly seem to have a case depending on the answers to the questions above. Of course your first action should be to consult a real estate attorney. Now agents/brokers can be held to a higher standard then the seller. So it will depend on all the facts as to who is going to be liable if anyone. So just take all the paperwork and consult your attorney. If possible use the attorney you used for closing as long as he is yours not the sellers. They will already have all the information of both parties.

Hope this helps,

YES! Anyone can. That is the law and no one can defeat it.

No, but they can lose their license for misrepresenting the property, and you can sue the Real Estate firm for damages (I believe).

The number of bedrooms is determined by the septic or city sewer permit, at the building dept. when the home was built. If it was added on without a permit they can be forced to take it out. You can not advertize it as another bedroom just because it has a window or a closet. This happens all the time with billy bob handy man homeowner. That is why its important for Agents to do their homework and not take the homeowners word for it before listing the home and buyers agents unitentionally misinform. I don't think they will be guilty of fraud but maybe of negligent misrepresentation. If the buyers agent relies on incorrect info provided by a listing agent through the MLS even with disclaimers, the buyer's agent may be held liable if he or she should have reasonably have known the info was correct. The fact that the agent was ignorant about the issue is no excuse.

Anybody can be accused of commiting fruad, but being found guilty is a different story. According to the tax records or property assessors records, facts may be somewhat inconsistant with listing and marketing material. Most listings do provide a disclaimer, and limitations.

Did the buyer see the home prior to signing the contract? Typically, the dispute in these matters revolve around Bonus Rooms. Some agents list them as 3 Bedrooms plus bonus, others as 4 bedroom. My rule of thumb is if it has a window that you could escape through in a fire and a closet, its a bedroom. Either way, I don't think the RE Commission will find fraud since MLS listings can have mistakes (which is why there are disclaimers on the bottom). Call the NCREC or call a real estate attorney for advice. Please post your findings so that we can all learn as a result of your discovery.

It sounds like it would be up to a judge or arbitrator to decide. On one hand the buyer had the opportunity to see and decide for themselves if it was three or four bedrooms. On the other the buyer may not have had the knowledge of what constitutes a legal bedroom. If it hasn't closed yet the best solution may be to cancel the contract.

Fraud is a very strong word. I define fraud as an intentional act of deception combined with the motivation of illegal monetary gain. It is very hard to make such an accusation stick. misrepresentation may be intentional, or it may be negligent or careless, it may be unintended. and it may be perceptional.

An example of a matter of perception: Seller honeslty believes fourth room is a bedroom, but you believe it should be called a den.

An example of unintentional: Agent is used to an MLS system which allows dens to be called bedrooms, but is entering information on a system where the rule is dens are not bedrooms.

An example of carelessness: Agent is aware of den not a bedroom rule in his MLS, sees a bed in the den, doesn't check to see if there is a closet, labels it as a fourth bedroom anyway.

I think it might be over reaching to call the situation you referred to as fraud. You may be able to get out of the contract anyway, even if the misrepresentation was unintended, by invoking your inspection contingency right to cancel, if you have an inspection contingency in your contract.

If there was wilfull misrepresentation, you might have a case. The question of 3 vs 4 bedrooms is one that I have seen before. In most cases it is a common miscommunication. Typically it is when a bonus room is counted as a bedroom because the seller used it as a bedroom. However, if there is no closet, it is commonly not considered to be a "bedroom." Of course, the arguement could be made that older homes with no closets still had bedrooms! Even if there was misrepresentation, that still would need to be proven in court, which could be hard to prove.
A good home inspection and appraisal are beneficial when buying a home to avoid these types of issues.

Anthony,
It depends; did the buyer have agent representation? What is it that makes the home a 3 bedroom and not a 4 bedroom?