Tuesday, Jan 22, 2008
If only.... :)
New York Times: Feeling Misled on Home Price, Buyers Sue Agent
CARLSBAD, Calif. — Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom.
What makes Ms. Ummel different is that she is suing her agent, saying it was all his fault.
Ms. Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.
Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase.
Posted by lvmreader @ 07:14 PM (595 views) Add Comment
8 Comments
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1. growler said...
I've raised this before. Consider this: If you pay for mortgage company or agent to act as your professional for your purchase - and this advice does not include explaining the risk of such a high mortgage let alone a possible housing slide - then I think the company is negligent. Since: If they would now NOT lend to you and before the issues surface WOULD, then if your circumstances have not changed, they what are they saying? "We have done our homework now and think this 25-year commitment has gone from a yes to a no in a matter of a few weeks". Who is looking after the clients interest?
2. lvmreader said...
Isn't this the problem inherent in credit ratings.
"Yes 2 years ago you were a good customer, but now you are human garbage because the markets took a downturn"
How crazy is that? How is someone you were prepared to lend to 2 years ago, suddenly unworthy now? Credit Ratings currently are a measure of luck.
3. hpwatcher said...
I hope she wins and sets a new precedent.
4. p. doff said...
What utter cr@p. I haven't bothered to read the article.
I don't normally leap to the defence of estate agents, but who do you think they act for - its the seller, not the buyer.
When somebody loses out through stupidity or greed in todays world, it always has to be somebody elses fault doesn't it.
5. dohousescrashinthewoods said...
p. doff, I tend to agree. Is this a plea for justice in the face of vicious, nasty sales people, or a prime candidate for the Stella Awards? I guess if boils down to whether the agent knowingly and actively defrauded the customer. It would set a worrying precedent for Foxtons given that defrauding customers is their mainline of business.
Then again, anyone paying that much for a house is making a "Northern Rock" decision and will probably have to shut up and eat their pie, rather than trying to get bailed out. Turning it around again, this is no different to what any cut-throat business would do - ruthlesly externalise losses to a third party. Did someone say "Goldman Sachs is shorting the sub-prime instruments it is promoting"?
6. drewster said...
@lvmreader: Good post!
Maybe we'll see some of this happening over here, but because the extent of the fraud was lower and the speed of the boom slower, it seems unlikely. In America the entire bubble was concentrated in the years after 2001; whereas in the UK the bubble has been brewing since housing hit a low in 1995/6.
7. renting2 said...
Do not forget that a lender will only lend on the strength of a valuation. Hence the RICs members downvaluing everything (think - who would you sue?). It does not matter how much the buyer is prepared to pay if a mortgage is involved, it is what the valuer says that matters.
8. growler said...
I think blaming the EA is unlikely to work as people have said. Caveat Emptor. But I've read US court rulings that found favour for a client who claimed on his fire insurance when his cigars when up in smoke - as a result of him lighting them!!! I think the mortgage broker is the right place to sue. They are providing a service for a fee and should do that job with the customers interests at the centre. If they have been advised or get commission from the selling EA for a lead, then there is conflict of interest that can lead to the seller being marketed a "deal" without full objectivity.