I am a dual agent on this deal, appraisal came in at contract price on fri, I notified all parties

Asked by Mary Jamison, Fuquay Varina, NC Fri Feb 27, 2009

everythings good. move forward buyer called on Mon had a problem with appraisal, could not reaach her, called the lender, the buyer had called the appraiser and convinced her to revisit the appraisal, it was then changed to reflect a lower price comp, I found out this comp is a distress sale, and notified everyone, buyer has a fit, I am not buying this home ( it was $4000 apart) It has become apparant the she wanted out of the deal, did she influnce the appraiser?? I think so, seller is now mad, no one wants to return the EM...sitting in my trust account. they did sign term agreement without release of EM.The buyer is now making threats to me that I did not protect her rights, and it gets better, she wanted a fence , we gave her all the info pertaining to a fence prior to offer, now she says she could not put the fence where she wanted for her dogs, we were still in the discovery process with gas co where fence could go, when she pushed the appraisl issue to get out of contract.

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Patty Woolf, , Asheville, NC
Fri Mar 6, 2009
Thank you for your feedback on the situation and congrats on getting it sold again! I would love to keep the dialogue going about pricing because we are seeing more distressed sales and as that happens, non-distressed will get caught up in the valuations. It's great to chat with another professional!
Patty
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Mary Jamison, Agent, Fuquay Varina, NC
Thu Mar 5, 2009
An update: Thank you all for very sound advice! I realize now when I wrote this question I was very frustrated, and it showed! The client for the appraiser, the bank, did order the appraisal revisited, however I feel the appraiser failed to find out that it was not a true arms length transaction. The sellers have decided to return the EM, and I have sold their home again. It will be very interesting to see where the appraisal comes in this time. The listing agent on the home that was sold for less money in the neighborhood now says: “her clients just needed to sell their home, and took whatever price they could get for it. She stated: "Does that make it a distress sale, I don’t know".
However she reported to me when I spoke with her about it the first time, "that this was a distress sale, ( her words, not mine) “and we gave the home away , I know it sold for less than it should have".

I would encourage any agent to make some notation in MLS when a home sells for less than the neighborhood average, this will give the appraiser a heads up on it. We are now only required to report if it is a foreclosure or a short sale.

So this has become a question now? In our economic times, if a home sells for a price that is below the recent comps, and is not reported to be a short sale or foreclosure, does that in fact make it a comp that can be used, as it may be indicative of what is to come in that neighborhood as so many homes are selling well below asking price now. If there are no other sales in that neighborhood, I can see it becoming a big issue.
Through all this I did try my best to represent both sides to the best of my abilities in a fair and balanced manner. Many hours were spent on the phone with the RE Commission, Appraisal Board, and Attorneys among others to try to get a clear answer. However the clear answer became all parties would have valid points, and a court would have to decide who was right.
The bank refused to call the seller with answers to his questions about the appraisal. So after we sold his home again (in less than a week!) He finally signed off on return of EM and buyers are happy to have their money back.
it is very hard to represent both sides, I have done it several times in the past, with great results, but I agree that it is a very hard place to be and sometimes it is hard not to become attached to the outcome.Thanks again for the advice!
0 votes
Patty Woolf, , Asheville, NC
Sat Feb 28, 2009
Hi Mary,
There is no replacement for frank talk. Meet face-to-face with the buyer and ask flat out, do you want out of the contract? Find out if the buyer actually wants the home or not. That will help you to help them to move in whichever direction they need. Don't be attached to the outcome, be attached to discovering the core and helping buyer and seller in that situation. The appraisal issue may become a mute point once you find out what the core objection is. Don't let your personal emotions into this at all and instead validate how the buyer and the seller are feeling. You represent them both, after all. In every tough situation, I've discovered that asking questions and listening to the answers has solved the problem and left me in a respected position. Before you sit down with them, make sure you have gone over their choices and the potential outcomes of those choices. If you don't know the answer to a question, be honest and say so and that you'll find it out. Discover, discover, discover and you will disarm. I wish you the best of steel nerves and success!! Keep us all posted :) And feel free to call if you'd like to practice the conversation first. 828-230-0940.
Patty
0 votes
Wendy Norman, , Raleigh, NC
Sat Feb 28, 2009
Who was the actual client for the appraisal? If she had a lender, the lender is the client... did the lender have a role in the revisiting of the appraisal? If the appraiser was using truly comparable comps, then he/she would not have used a distress sale as a comp unless this home was also a distress sale (or if there was nothing else to compare the subject property to, which doesn't seem to be the case, they would have had to make some type of adjustment for distress/non distress and note that in the report as to why it was used...usually, they always want to make sure that the comps used were arm's length transactions, which a distress sale obviously is not. They'll pick comps that "frame" the subject property in a range w/ one comp being lower, one being similar, and one being higher...then they adjust based on condition, age, etc from there). Perhaps the buyer didn't truly understand that in dual agency, the only person truly representing her rights is herself and it's up to her to do a lot of the research with resources that you give her as well as the list side... agents go from being the "coach" to being the "referee"... can't advise either side, only pass info back and forth. Unless I had a very educated unrepresented buyer (builder, contractor, developer, or someone who was very real estate savvy), I, personally, would probably refer it out to another agent in the office to avoid what some could perceive as a conflict of interests. Maybe Alt. 1 will be a thing of the past before too long and transactions will go a little smoother w/ Alt. 2. Hope things work out for you!
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Barrett Powe…, , Cary, NC
Sat Feb 28, 2009
If you ever get into a dual agency situation in North Carolina, always use option 2 and refrain from being a part of the negociations. Become a messenger only.

It doesn't help you now, but make this a positive by learning something from the experience. Remain positive, go sell the property again and try and find your buyer another property if that is possible.
0 votes
James Gordon…, Agent, Hamilton, OH
Sat Feb 28, 2009
Mary you have run into the main problem with dual agency. Who do you represent? That is why I will not do dual agency.

Good luck with this one you need to make your attorney aware of what is going on and document everything.
Web Reference:  http://www.Find1Home.com
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