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Marvin Olasky offers two cheers for John Calvin on the Reformer's 500th birthday. 
It’s your fault I’m in this pickle!
When Marty Ummel realized she had paid too much for her home, she decided to take action: She is suing her realtor.
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.
“When your house appreciates $100,000 in the first six months, you’re not quite as concerned that maybe the valuation was $25,000 or $50,000 off,” said Clifford Horner of the law firm Horner & Singer. “But when your house goes down, you ask: ‘Who might have led me astray here?’”
Ummel says agent Mike Little didn’t disclose “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.” But Little says Ummel isn’t taking responsibility for her own failure to do research before purchasing the home.
Who’s at fault here, and what obligations do real estate agents have to their clients?
back to top24 Comments to “It’s your fault I’m in this pickle!”
In this situation it depends on whether he was representing her as her buyers agent, the seller as the seller’s agent, or was simply acting as a transaction broker in which he had no obligation to the buyer or seller. Ultimately in my state the rule is buyer beware. I assume there was an appraisal, survey, and mortgage and that this was not a cash deal. It was a wild market there for a couple of years. I am sure the lawyers will have a field day and really the buyer hasn’t lost anything until they try to sell.
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I’ve long known that realtors will sell you a house, and mortgage lenders will qualify you for a loan, that you really can’t afford.
We just didn’t bite when ours tried it. Instead we bought from a private individual.
You’re also supposed to have your own lawyer when you close, but hardly anyone does.
Lot’s of pitfalls when buying a house.
But I don’t think that’s an excuse to not do your homework on the subject. Stuff I’ve read says to check the area several different times of the day and week, and compare prices of other houses in the area. It’s not that hard to pick up a realty magazine and find houses for sale in the same area, or drive through the area several times. With an investment of that size, it pays to do some investigation. It would be foolish not to.
I don’t think this suit is going anywhere.
If it does, then look for lawsuits against mortgage companies who extended shaky credit to shaky borrowers. I tend not to feel sorry for either one. They both knew what could happen.
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There are so many things a realtor cannot tell you because it opens them up to a law suit…You will love this neighborhood, there are lots of children…that is steering the buyer especially if they have children. You will love this house…it is close to St. Mary’s Catholic church. That violates religious freedom. You will like this neighborhood…it is close to really good schools. The customer buys the house and hates the school. You steered them towards it. You don’t want to live in this neighborhood there are too many children or retirees. One example was a realtor suggested that the buyers go back through a neighborhood at dusk…they saw a drug deal happening. It went to court. Why did the realtor suggest that they go back (the seller sued). And no it isn’t always best to buy from an individual. One neighborhood where I live has gone back and is making everyone provide some sort of car cover. Many people had closed in their garages for a family room or extra bedroom. If you buy in that neighborhood you have to either open the garage back up or build a new one within a certain period of time.
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I think it boils down to blaming someone else for something you should take responsibility for.
But that’s the human condition…
“But the woman gave it to me…”
“But the snake beguiled me…”
And thus women and lawyers have always gotten a bad rap…
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All this case will do is force realtors to charge more for their services to cover any potential future lawsuits.
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Besides…
Isn’t this a buyers market? Homes around here have been sitting.
Anyone with half a brain should know to negotiate a price just so the seller can move their house!
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Almost all these prohibitions Kim talks about, on what Realtors can say to their clients, came about in the late 1960s and were enacted to prevent “discrimination”; in other words, these idiotic, often insane rules are another part of the Rev. Dr. Martin Luther King’s legacy. You should thank him that your Realtor is not allowed to talk about some of the most important factors that go into deciding where to live.
I found out about these laws, as I suspect most people do, by asking a question my Realtor wasn’t even allowed to answer. That’s right; not only can they not volunteer info and “steer” you, they also are forbidden to answer “evil” questions. A few years ago I was renting an apartment in a city, and decided I’d like to move to another city and buy a home for various reasons. I’d been there many times, and had friends there. But it was a few hundred miles away. So I called a Realtor, told them what price range and house type I had in mind, and asked her to call me when she found something. A few weeks later she called saying she’d found a house. She talked about it, and it sounded pretty good. So I asked her if it was in the white part of town or the black part of town. She got all huffy and said “I can’t answer that question.” I asked her what she meant – had she not even been by the house and seen the neighborhood? No, she replied, “I mean I’m not allowed to answer that question. It’s against the law.” “You’ve got to be kidding me”, I replied. But no, she wasn’t kidding, and had she answered that question, or a myriad of other relevant questions, she could’ve lost her real estate license for life.
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You are absolutely right Night Train. The Fair Housing Board can “shop” you and even use tax dollars to go through with a purchase. I was shopped early in my real estate career. A black woman called me from Oregon and wanted to move to our area to be near family. During the conversation she stated that she lived in a mostly white community and her children didn’t know how to get along with “their own kind”. Later you asked me to help her not buy a house in the ghetto. I told her she needed to ask her family about the areas to live in. The main thing that saved me I that I was really talking up the neighborhood I lived in. Because I was asking her to be my neighbor I saved my butt. I only found out later what was going on when she stopped returning my calls and my broker was contacted about me.
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But the snake beguiled me…”
That’s a real believable part of the Bible. “Honest, Jesus, Jehovah, Holyghost, there was this walking, talking snake, see…but wait, before I finish the story, would you guys happen to have a bra and panties handy? I can’t believe I’ve been walking around naked this whole time and none of you guys said a word about it!”
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The buyer can talk to many people in the area, check out the cost of homes in the general vicinity. Buyers need to accept responsibility for their actions.
People decide their going to buy a home, even though they don’t have the down payment, or don’t have enough for a 20%-10% down. If that’s the case, they often times will go for 100% financing. No money in the bank, nothing to fall back on. When the going gets rough, its time to blame someone, why not the realtor. The buyer knew they didn’t have the money.
Blaming someone for the house you bought, price you paid, not enough to cover the bills when the economy is in trouble, certainly isn’t the realtor’s fault.
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I believe the phrase is “caveat emptor.”
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She should be suing George Bush rather than her realtor. Bad housing deals are always his fault.
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Ummel says agent Mike Little didn’t disclose “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.”
Ummel is an idiot for not asking – or demanding – comps. That’s the first thing we did when were looking at homes in specific neighborhoods.
Caveat emptor indeed.
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Lester, – one can also find out quickly what the houses are selling for in any area……just go into any ‘OPEN HOUSE’ look around and ask the listing price, go to as many ‘OPEN HOUSES’ as you can, in the area you are looking at, check them out.
No one needs to depend on a realtor to tell them how much the homes are selling for. In todays market, the home price changes weekly.
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Victoria – if I’m paying a realtor, then I’m making him do the work. That’s his job and he’s making a good commission.
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OK let’s take a 300,000 house. The buyers agent gets 2.4% commission. That is $6,120 Now I was on a team so that meant I split my commission 50/50 so that is $3000 then I had to pay my desk fees $788. MLS fees, gas, etc. Maybe I walked away with $1500. Realtors don’t make the money the rest of you think they do. It is one of those businesses where you can definately spend more than you make. Just ask me. I am now working in a car dealership.
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We don’t have all the facts here; that will happen during trial, so I can’t guess what will happen here. Kim’s statement: “I assume there was an appraisal, survey, and mortgage and that this was not a cash deal.” I’m wondering if Ms. Ummel read the appraisal. Appraisals I have seen have at least 3 comps. Just because Ummel says the broker didn’t tell her that other houses were selling for less doesn’t mean the broker did that. This is only her side of the story. People often expect a return on an investment but fail to remember that they are not guaranteed a profit. Kim is also right that Ms. Ummel hasn’t lost anything. What I learned working in residential lending is that many people read absolutely nothing and sign anything. I was surprised by how many people did that. Some people just look for trouble, and Ms. Ummel gives me that feeling.
My initial reaction when I read this was to say: gee, I hope she held onto the receipt and the original box it came in.
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Lester,
It’s YOUR RESPONSIBILITY to know what you are buying, blaming someone else is lazy. If you’re smart enough to make the money, then use the same intelligence to spend it wisely. Checking out the facts. A home is a large investment.
Strange how people who make a huge profit from their home investment, (much more than was expected) never go back and ‘tip’ the realtor! I have friends in the business, they sure haven’t mentioned a big TIP.
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“I am now working in a car dealership.’
Ooooooo…. out of the pan into the fire…
Sorry girl. I worked years for a dealership as a mechanic. Can’t say I enjoyed much of it myself… Perhaps your experience will be different.
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Victoria & Co.,
It’s the buyer’s responsibility to research prices when the buyer is shopping on his own. But when the buyer establishes a fiduciary relationship with a realtor, the realtor has a legal responsibility to represent the buyer’s best interest. That’s why we refer to them as “AGENTS.”
Even buyer’s agents collect half of the commission. If a typical suburban house is $600k and the realtor commission is 7%, the buyer’s agent is walking away with $21,000 in her pocket. She’s collecting that money for her representation of the buyer.
If the realtor breached her duty of loyalty to her client, then she should be sued. If she was reckless in doing so, then she should have to pay exemplary damages of up to 9X her client’s loss.
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Actually Make It Man I hate it. It is it’s own little soap opera. But the good news is I have a job interview Thursday and it is in the printing industry which I know a little about and can bluff my way the rest. I am really excited about it.
Kiyoshi, look at my example above as to how I was paid and my understanding is that in the markets where the house prices had soared they had driven down the realtors commissions. I thing in 2005 which was the height of the boom the rate in California was pressed down to 4%. At least that is what one of the investors I worked with told me.
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Kiyoshi
It sounds to me like the property probably appraised for the selling price. Everyone gets a copy of the APPRAISAL, so the buyer knew how much it was worth at THE TIME OF SALE.
Whatever happened after the sale, is not the realtors fault. Maybe the buyer should contact the Appraser, that’s the person who put a dollar amount of the homes worth on paper.
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You can sum it up in two words. Buyer beware.
Or you can sum it up in one sentence. A fool is easily separated from his money.
No matter how you sum it up, you cannot give responsibility for you buying something to someone else and make them responsible in the least unless you have given them your proxy to do so. Otherwise you are responsible for what you do – or buy.
Every new and used car salesman would be in jail for selling cars over what they usually sell them for to savvy buyers.
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Lama, I couldn’t agree with you more!!!!
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