Declining Home Value Spurs Woman to File Lawsuit against Real Estate Agent
By Gerri L. Elder
Many people who bought their homes during the housing boom may now be feeling a bit of disappointment and buyers' remorse. To many, it really didn't matter what price they paid for their homes in the days when homes were rapidly increasing in value; they were virtually assured of getting a good deal and making a sound investment.
However, what goes up must come down, and never was that more true than with the housing market. When it crashed, it crashed hard, and homeowners then began to realize that property is only worth what you can get a buyer to pay for it. With the sub-prime shakeup and foreclosure epidemic, suddenly there were no more buyers and property values began their spiral - and it's not over yet.
For most people who now feel that they paid too much for their homes, there is little they can do about it. The only real option for home owners now is to ride it out or lose the investment. However, one woman in California says there is something more she can do about the situation that she now finds herself in.
Marty Ummel believes that she paid too much for her Southern California home and is suing her real estate agent because of it. Ummel claims that her agent failed to disclose information about the prices that similar homes in the neighborhood were selling for because he feared she would back out of the deal if he told her. If she had backed out of the deal, he would have lost a $30,000 commission on the sale.
The lawsuit is the first of its kind, but not likely to be the last. Real estate lawyers and brokers say that there will probably be many people who regret their home purchases and will thus be watching this case with the hope that they can also sue the real estate agents who sold them their homes.
During the real estate boom in the late 80s, real estate brokers mainly worked only for the sellers. They may have offered assistance and advice to the buyers, but with the understanding that they were legally representing the sellers. However, in the late 90s, things began to change. Another housing boom was getting underway and real estate agents began to provide advice to and to negotiate for home owners. Buyer's agents, unlike the real estate brokers who solely represent the seller, have a legal obligation or a fiduciary duty to the home buyers they represent.
So while there were no lawsuits against real estate agents and brokers after the 80s housing boom, lawsuits like Marty Ummel's may soon become common when considering the legal responsibilities the buyer's agents took on during the recent housing boom.
Ummel's lawsuit is against veteran ReMax Associates agent Mike Little. Attorney's for Little will argue in court that Ummel is simply trying to shift the blame to him after she failed to research and show due diligence in regard to the purchase of the home.
Real estate brokers are not home appraisers, and while they have fiduciary duties to the home buyers they represent, they don't make a dime unless they make the sale. So it may simply be a case of buyer beware when an agent makes comments about the value of a property - since this is actually not their job.
Ummel's lawsuit may be a landmark case in this area. If she is successful with her lawsuit, the floodgates may open with other disappointed home buyers running to court in an attempt to recoup what they feel they have lost.