New York Times Article of Buyer VS Agent: Any opinions?

Asked by Jordan Stuhlmueller, Los Gatos, CA Fri Jan 25, 2008

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Jordan Stuhl…, , Los Gatos, CA
Sat Apr 12, 2008
Hey all,

The verdict is in! Below is an outline of the jury's verdict to this case. Any thoughts?

"Friday, April 11, 2008

After only two hours of deliberation yesterday, the jury unanimously vindicated a buyer's agent accused by his clients of failing to disclose that two other homes in the neighborhood sold for less than what they paid. As a trial court case, this decision in Ummel v. Little is binding on the parties to the case, but has no binding authority for other cases. Moreover, the buyers may file an appeal.

This case involved a couple who bought a home in a coastal Carlsbad community in 2005 for $1.2 million. They regretted their purchase when they discovered that two other homes sold for about $150,000 less than theirs. They sued their real estate agent for negligent misrepresentation and breach of fiduciary duty. Their lawsuit grabbed national attention, given the recent downturn in the real estate market.

At the trial, the agent's attorney argued that there were valid reasons these two other properties sold for less. One home, for example, had a lap pool which was unappealing to many buyers, and the sellers wanted to rent back the home for two years."

All the best,
~ jordan elias
0 votes
;, , Riverhead, NY
Sun Jan 27, 2008
What this case has compelled me to require now is an initial from the buyers on the most recent closed and available comps at the time that an offer is made. Taking this position will provide them of the certainty that they are comfortable with the price offered, and aware of market conditions at the TIME of purchase- as a buyer's agent, it is our responsibility to inform buyers that the extent of our control in the market is this moment, with all disclosures performed.
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Brand Spanki…, Home Buyer, California
Fri Jan 25, 2008
As a buyer, I did my own research before I made a bid on my house. I would hope that a couple with that much money would have had the brains to check other sources first before jumping into a large transaction such as that. It's not like the guy had a gun to their heads and they didn't have access to the media that had been spewing about the down cycle in housing! They are both in education, which would make me think they would have "DONE THEIR HOMEWORK".

What sucks is that this woman is an administrator at my alma mater... makes me wonder about the intellect of the staff/ faculty... grrr.
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Linette Carr…, Agent, Wilmington, DE
Fri Jan 25, 2008
Based on what I have read and not knowing all of the facts of this case, it sounds like the realtor had some responsability to inform the buyers of other homes that have sold in the neighborhood and if an appraisal was done they should have been able to see it. But, there is also some blame on the buyers side. Why didn't they insist on seeing the appraisal before they closed?Why didn't they ask for comps in the neighborhood? They seem to be bright folks. Why didn't they do their due diligence. We live in a world where no one wants to accept responsability for what goes wrong. It always has to be someone elses fault. We see it in the news all of the time. Whenever there is a tragedy, weeks are spent with everyone pointing fingers at everyone else. How about looking in the mirror and asking, what could I have done to avoid this? Blame is such a waste of everyones time. I will get off of my soap box now.
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Ginger R., Home Seller, Massachusetts
Fri Jan 25, 2008
Hey Jordan - Ty for the link and the summary!!! Interesting article.
1. I really don't like the idea of a a buyer's agent who also is the mortgage broker on the deal. I fault the agent but also the buyer on this one for going along with it.
2. Appraisal is an approximation, not a scientific equation. I think a range of value of 10% is not indicative of deception, especially in a shifting market. I think it is a standard deviation within the norm.
3. The fact that the buyers "dismissed one agent and canceled deals on two houses" leads me to believe that they may be demanding buyers with unrealistic expectations.
4. Somehow we perceive stocks as liquid assets that go up and down in value and real estate as not so liquid but it always goes up in value. Real estate is an illiquid asset that goes up and down.

Without knowing all the facts, it seems to me that they buyers are blaming the agent for market conditions. I don't like the fact that they sued the appraiser, the mortgage broker, and now the agent and the real estate firm. They apparently believe that everyone was out to get them.

I hope that this is not the start of a trend.
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Jordan Stuhl…, , Los Gatos, CA
Fri Jan 25, 2008
Sorry Ginger, you beat me to it! Have a nice weekend!!
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Jordan Stuhl…, , Los Gatos, CA
Fri Jan 25, 2008
First off, I have included the link to this article below for those who haven't read it.
The gist:
A set of Buyers are suing the Realtor who sold them a home at the height of the market, claiming he misled them into thinking the home was worth more than it's value.
The twist:
The Realtor also acted as the mortgage broker, and the previous owner was a Realtor.

I may be opening a can of worms here, but I'm fishing to hear other's thoughts on this issue. I don't think this will be an isolated incident for long!
0 votes
Ginger R., Home Seller, Massachusetts
Fri Jan 25, 2008
My opinion is that you shoulld post a link. He he. But it would be helpful.
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