Home Buying in Portsmouth>Question Details

Sheila Nelson, Home Buyer in Barre, VT

A question about ethics and how the RE Commission works in NH

Asked by Sheila Nelson, Barre, VT Wed Jul 2, 2008

I have a house under contract. The listing broker was so nice that I thought that he could do no harm. Well I never signed the dual agency form because I thought if this property fell through that I would hire a buyer broker and go look at other houses. So when it came time to make an offer, I emailed the broker with my basic offer info (sales price, close date, inspection days, etc). I did not say what inspections I wanted as I thought I'd check them off myself. He sent me the pre-filled P&S and it had boxes already checked off for inspections. "SEWER" was not checked off & I emailed him about it & asked to add it. He said, "no, this house doesn't have a sewer it is public" This made little sense to me but I left it unchecked. Well I located the previous homeowner and the sewer backs up every few months due to bad angle in pipe. Disclosures were blank as it was bank owned. I suspect this broker knew something was up with it. My questions: What should I do? Who should I contact?

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Answers

6
You should have hired a buyer broker to begin with, but seeing you did not, then I suggest you discuss with a lawyer. A foreclosure can especially be a tricky purchase because the house is typically being sold "as is" with no disclosure statement. If you are still at the point of needing (wanting) to carry out your other inspections to see if you want to buy the house, then perhaps those will show something else that may give you an "out" on your contract. (Maybe, maybe not) Are you within the timelines set forth in the contract? I suggest strongly that you a) call a RE lawyer and get advice or b) simply back out of the contract given that this knowledge has come to your attention, but call a lawyer first to understand the ramifications of that). If you are past inspections already and this is the only issue, then you might consider forfeiting your deposit money and walking away if the lender will not fix the problem or see to it that the town gets a fix on it... but that can be tricky too and the lender may or may not let you out of the agreement. I would hire an attorney to call the lender (the lender for the seller) and see if they would reduce the price or fix the problem or perhaps call the town to fix the problem which they should if indeed it is a public septic system. I do not know how much I would believe from the previous owner because they might be just sour anyway that they are losing their home. It also would not hurt to call the town to verify this "backing up" as a starter. They might have some knowledge or be able to make some definitive statements on the issue. Above all, get a lawyer's advice.
Web Reference: http://www.popesays.com
2 votes Thank Flag Link Wed Jul 2, 2008
Although this is an older question i do wonder how you made out Sheila. My advice would be that he wasnt representing you if you didnt hire him as a buyer broker therefore a dual agency form was not required however a agency disclosure was required notifying you that he represented the seller. This is a huge item with the real estate commission. As far as the contract, you should have checked anything you felt you wanted checked and gone ahead and checked it if it wasnt. As far as litigation you would have to prove the listing agent knew something about the sewer. In most cases the agent can only see what you see with their naked eye and only learn of items through inspections unless he had the house previous listed. I hope you were able to work things out.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sun Feb 1, 2009
Sheila,

I don't know if having a buyer broker would have made a difference. Your home inspections may or may not have come up with the defect in the home. If the listing agent had previous knowledge of the defect, it should have been disclosed, otherwise consult with an attorney and see where it goes. Many listing agents dealing with bank owned properties have a team of workers to address issues as they arise. Getting an outstanding value on a bank owned property comes with some risk as the seller discloses nothing.
Good luck!
Web Reference: http://www.tjoyce.com
0 votes Thank Flag Link Wed Jan 28, 2009
I'm not sure I agree 100% with hiring a buyer broker as much as I feel it sounds like the listing agent didn't abide by the terms of what is called DUAL DISCLOSED AGENCY. There are a couple of factors here. 1. Bank Owned Property-can sometimes be a phenomenal deal but keep in mind when buying it, you are buying it as is,where is with no representations or warranties. I have represented dozens of buyers looking at foreclosed property most have been good (a couple have had a few small surprised including a street sewer pipe filled with tree roots for 25'). Some lenders will let you have a home inspection and back out if you're not happy, others will let you have a home inspection but won't make a concessions if you find something and then some banks wont permit an expection at all. 2. It SOUNDS like if things transpired the way you described, you definitely should seek the advice of a Real Estate Lawyer, a second alternative is to also file a complaint with the NH Real Estate Commission and the ethics committee can take a look at your complaint to see if there has been an indiscretion made by the agent. Since this happened so long ago and myself being a new member to trulia, I hope somehow this response finds its way to you so I can hear how things progressed and how you made out.
0 votes Thank Flag Link Thu Jan 22, 2009
at this point you sould consult with legal counsel and get advise on how to proceed
Web Reference: http://www.JustListedNH.com
0 votes Thank Flag Link Thu Jul 3, 2008
Hi Buddy Pope,

Thanks for responding. Definitely should have hired a buyer's broker.

I think the problem is more about the agent's actions. He is not representing me. He did not give me the dual agency disclosure form until I was making the offer. I'm reading now that I think he should have given it to me when he showed me the property. I think the mis-step occured when he pre-filled the inspections section without even talking to me about it, and then when I inquired further about the SEWER inspection in particular, he adivsed me NOT to check the box. I should have known something was up when he said don't check the box because it was "public". Of course it was public, it is in a city - however, it still could have a sewer pipe issue. And in this case, it does! The previous owner was quite nice about it and almost seemed hesitant to tell me about it at first. There is also some evidence at the property that backs up the previous owner's story (didn't all fit until looked at the whole puzzle). The previous owner went so far as to say that they had people out twice to look at it and the entire sewer pipe needs to be replaced due to age and angle.

Another bit of info - I've pulled the property disclosure which is essentially 99% "unknown"... however, the sewer question is not answered at all. Known Malfunctions? YES or NO is not answered.

I have 1 day left in inspection period. Of couse the SEWER inspection was not part of the contract but I can still ask for "seller to repair or replace sewer line as per required and deemed fit by a professional or specialist prior to closing". I do want to purchase the home but this issue would have to be resolved completely before I move into the property. The bank will likely not go for this since they want to get rid of it ASAP.

Either this broker is not very smart or was out to deceive. Either way this could cost me $8-$10K or more. I'd feel bad to cause "trouble" if he was just simply ignorant about this issue, or I'd feel very cheated if he knew all along.

The property was under contract before but it fell through after inspections. The broker said they did not know why. Is that really possible? If I inform the bank of this problem in writing, and still do not buy the house, is the bank (seller) required to disclose this to a future potential buyer.
0 votes Thank Flag Link Wed Jul 2, 2008
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