Jan
25
2008
Today Show Realtor Lawsuit
By Charles TurnerBuy at the top of the market and then the market drops. Who’s to blame? This San Diego couple is suing their Realtor. More clearly stated, the wife is suing the agent and the husband is “supporting her.” The expert brought in by the Today Show doesn’t think they have a case:Portland Real Estate Blog
The person sueing has good points. What’s the point of of paying agents a huge commission if you can’t depend on him/her to give you all the relevant information?
I can not say I have understood the commission angle for Realtors. It seems to me that the angle is tilted in favor of higher prices.
Time to write Sentators Smith & Wyden and ask them to oppose raising the conforming loan limit. It’s a bailout for California, but it’ll hurt most other areas of the country, including Oregon:
The economic “stimulus” program contains provisions to raise the conforming limit to over $700K. A really stupid move (even the director of OFHEO says it’s a very bad idea – OFHEO is the regulator charged with ensuring the safety and soundness of Fannie Mae and Freddie Mac.). But guess what: if the idiots in WashingtonDC really end up doing this it’ll mean less loans will be made overall. The GSEs have a finite amount of $$ to lend. If they start making bigger loans it means they’ll be making less loans. A $729K loan made in CA could have been 2 (or maybe even 3) loans made in Oregon and easily could have been 3 or 4 loans made in the MidWest. Maybe good for California and a few other high priced areas, but not so good for the rest of the country. Oh, and the GSE’s were originally created with the intent of helping buyers of “modest means” – someone buying a $729K+ house is very well off. Write your Senators and complain.
Summary: “OMG I have the resources and ability to buy a 1.2M dollar home, but I feel so taken advantage of.”
She makes it sound like she has the intellect of a typical food stamp recipient. Ok, that was not nice to those on food stamps–most have greater intellectual ability.
I just love the husband’s remarks; especially when he is asked about paying attorney fees.
Here is my translation of what the husband is saying:
“I’d rather be happy than right.”
On the otherhand, maybe we should pause for a second. What happens if she is right (at least in the jury’s/judge’s eyes)?
How would you all feel if your agent lied to you? I have a relative in the industry, a home inspector for over 10 years. He’s done w/ the business. Why? Tired of realtors lying to the buyers. He has reported numerous realtors to “the board” for things like representing the buyer and the seller and his least favorite thing, the basements with major structural problems and the realtor says, “Oh, I have a guy that can fix that for less than a few thousand.”
And now that things are getting slow he is seeing more slime. He has a growing list of realtors he won’t work w/.
Yes, there may be some honest realtors out there but there are too many that are spoiling the industry.
Is the second over?
I learned several years ago that you can’t trust anyone who stands to make money off of your decisions. Stockbrokers, real estate agents, they’re all on the same level as car salesmen nowadays. Even doctors can’t be trusted. Or dentists.
When I was a kid my parents had a broker who advised them but didn’t steer them to investment vehicles that were recommended only because they carried a very high commission. Our family doctor didn’t prescribe drugs that he was getting paid to prescribe with trips to “conventions” on Caribbean islands. Our family dentist didn’t diagnose crowns we didn’t need so he could get a bigger TV.
That’s all changed. This last RE bubble showed us how craven RE agents can be. but wait, they say, we didn’t force those people to take out ridiculous loans! Sure you didn’t. You never cajoled them with the talk about “being priced out forever” or “getting in while you can”. You never directed them to weirdo loan terms. Of course not!
Please. This culture, this industry, this society are totally ruled by greed and self-interest. It’s quite sickening.
This lawsuit is making the rounds on various real estate website, with (sorry!) better comments. Main points to consider are:
1. established law is all that matters — not common sense, morality, etc.
2. this was apparently a buyer’s agent, *not* a real estate agent, so legal obligations may be different
3. CA state law is a beast unto itself
4. did the agent perform all that was contractually obligated? there may be some questions as to that since the comps were apparently not provided in a timely fashion
Doesn’t matter what perceived right vs. wrong is; all that matters is legal precedent.
Chris,
A few interesting points that are not obvious from the Today Show clip:
1) was it a buyer/broker relationship or dual agency? To me, the clip implies dual agency.
2) if it was a buyer/broker relationship, was there a contract stating as much? I’d estimate, that in Oregon, 95 out of 100 co-op transactions where there is a buyer’s agent and a listing agent do not include a contract between the buyer and their agent.
2.5) what expectations should a buyer have if they don’t sign a contract with someone that is representing them?
3) established law doesn’t amount to a hill of beans (more or less) until the above questions are clear; especially as California is a beast unto itself.
4) If the clip is taken at face value, the expert sitting there and her husband don’t agree with the lawsuit. The commentary is tilted in the agent’s favor too. There are lots of agents who should be sued and lose (most of them dual agents). This doesn’t appear, on the surface, to be one of them.
Listen to yourselves..talk about all the legal ramifications all you want but Charles, you have said that you utilize this site to advertise your services and you also state that most of the transactions you partake in are on the buyers side…
If I was a potential buyer looking for an agent and stumbled upon this site and looked at this particular post and your comments I would say: Bye! Bye! And keep looking.
You have not even stated that it was unethical, i.e. WRONG! to withhold info from your client. I do not understand we you folks cant see this point.
Just take a moment and look at it from a non-realtors perspective.
Though most of us would not pursue a lawsuit, word would get out to all my friends and family and coworkers and even the media if a realtor were to do that to me. And I know in the real estate business that word of mouth is an effective advertising tool.
A Realtor’s goal is to leverage the most from each transaction. Why should Realtors deserve 5% commission for facilitating the transaction of a home? Ridiculous. And with modern technology and all the resources available to the average person, I am surprised there is still a need for Realtors.
[Editor removed URL to another agent's website. Strange comment seeing that the URL is to a Realtor and the next sentence says there are no need for Realtors. If commenters want to say XXX is doing this cool thing over at ZZZ, feel free, just don't advertise other sites here for the sake of advertizing and rankings]
Bearlee, you miss the crux of a GOOD Realtor/client relationship. Ethics, to me, are the unstated ethos of what I do. It’s why I think dual agency is a conflict of those ethics the the LAW allows for it. The transaction is about a trust relationship. Not everyone wants to work with me and I don’t want to work with everyone. There is a reason our past clients become our friends and our past clients become our best source of referrals.
The comment I was replying to was about law, not ethics. I should have stated that there are are lots of agents who should be sued and lose (most of them dual agents for legal or ethic reasons. ,.
“If I [Bearlee] was a potential buyer looking for an agent and stumbled upon this site and looked at this particular post and your comments I would say: Bye! Bye! And keep looking.” It would probably be the best thing that happened to me.
If reading one post was the extent of your due diligence in selecting a Realtor there is a good chance it wouldn’t work out between us.
Charles, I am a FTHB in the process of selecting a Realtor to help me with my first purchase. I congratulate you on your blog. It is a great forum and there seems to be a montage of diverse people expressing their opinions here. However, based on your comments I do not believe that you would have my best interests in mind if I were to select you to represent me. Of all the Realtors I have been researching I find that Max Sinclair has the most useful website and also professional demeanor evident through the website.
I sincerely hope you do not delete this comment. I do not intend to criticize your business or website. My intent is to give you insight into this Portland First Time Home Buyer’s thought process on why I do not feel you are the right fit for us.
FTHB,
Blogging is tough. It’s a two way discourse. If everybody had a love affair with me and the market it would be a really boring site. A Realtor’s website, whether Max’s or our http://www.TurnerRealtors.com, is 100% content controlled by the Realtor and 100% marketing. This blog isn’t that and I hope the difference is clear.
Max has a great website. He independently hosts it outside of the Prudential Northwest Properties framework. TurnerRealtors uses the tools provided to us by Prudential. He is out of the Lake Oswego office and I am out of the West Portland office.
Ultimately, and I have said this many times before, you have to choose a Realtor based on your research. Interview both of us. I’ll be the first to admit that I won’t click with everyone. One of the reasons Jennifer and I work together is for that exact reason (she actually works with more first time buyers than I do).
Lastly, the only comments I have ever deleted have been at the request of the commenter or unsolicited advertising. I have let every other comment, no matter how derogatory towards me or the market stay.
Thank you for the honest and candid response. I appreciate that! I think I may have had some preconceived notions that I should have left at the door.
If the idea of you not representing me for my purchase was the best thing that ever happened to you then I think you live a pretty pathetic life:O)
Houses were pretty darn easy to sell when money was cheap (still ease) and easily accessible (hardly). Now with the recession and pending depression it won’t matter how great the house or location, it’s gonna be a tougher sell realtor or no realtor.
Great, now I’m pathetic. My pathetic life and I are going to a housewarming party.
Have a nice night.
No, I said your life is pathetic. There is a difference.
Charles said: “If I [Bearlee] was a potential buyer looking for an agent and stumbled upon this site and looked at this particular post and your comments I would say: Bye! Bye! And keep looking.” It would probably be the best thing that happened to me.
bearlee: Really?!?! The best thing?
So what did you collect on the commission for tonight’s house? Just curious though I don’t expect an answer. You do have a enormous mortgage and two big car payments so I am sure your skills were worth it.
Oh, now I am getting nasty. Better lay off the blogs for a while.
Zero, zip, nada, nothing, not a dime. I wasn’t the agent. The lucky homeowner is my best man’s new girfriend who was already in contract when we first met. Probably not the answer you expected.
What mortgage brokers can you recommend, particularly for IO options and 40 year amortization programs for First Time Homebuyer? Non-conforming if possible. I.e. sub prime. Does anyone know 2-3 trusted mortgage brokers that can be recommended?
Anonymous-
I recommend reading “Mortgage Ripoffs and Money Savers: An Industry Insider Explains How to Save Thousands on Your Mortgage or Re-Fi”
by Carolyn Warren.
Anonymous: I tend to think you’re joking around with us by asking about a “trusted” broker who will give you a “sub prime” loan. And the “IO 40 year amortization” thing, well, that’s a riot!
But in case you’re serious: those loans are gone and even when they were available there never were 2 or 3 “trusted” mortgage brokers who were pushing them (there were plenty of non-trustworthy mortgage brokers doing so, though – most had no clue what they were getting people into)
And again, in case you’re serious: why wouldn’t you just go with a 30-year fixed conforming loan at this point? Anything that isn’t conforming now has a much higher rate than a conforming loan.
As a Canadian, I’ve always balked at how litigation-happy Americans are. But this is ridiculous, even for America. I mean really, suing your agent for representing you on making your own decision? What’s next? Suing Starbucks for making hot coffee? (Wait, didn’t you already sue successfully for that?)
They wanted a home, they got a home. End of story.
The real issue here is that your legal system has spun out of control, with no signs of stopping. Someone has to reign that in, and it won’t be easy.
Until then, make sure that you are well insured. That’s the only way to protect yourself in American business these days.
John
Dear Canuck – No, the real issue is that a real estate agent was paid 30k for selling a 1.2 million dollar house, and that that agent (allegedly) did not do what he was paid to do (i.e., provide all truthful and relevant information about the local market to the buyer). Nice stereotype of the legal system in the U.S., though. Really thoughtful.