Entries Tagged as 'Disclosures'
Some of you will remember my post on the lawsuit in Southern California where the buyers of a home were suing their agent because they felt they overpaid, and the agent had acted to hide that information from them (Refresher available here).
This case had lawyers salivating, and brokers trembling, as it potentially could provide precedent and open the door to lawsuits by home buyers who purchased homes during the recent run-up in housing prices, and are now seeing their local markets stagnate or fall.
According to the following article released by the California Association of Realtors, the jury on the case found in favor of the real estate agent.
There was no mention of the issues that I flagged in my earlier post, namely that the agent didn’t share the appraisal or list of comparable properties with the client, or that he encouraged them to get their home loan through him and use his appraiser.
I’m sure that there are many real estate agents out there who also are great mortgage brokers. I’m not one of them. Frankly, I’m not smart enough to keep up with all the issues in real estate law and the local market, plus all the ongoing changes in the lending market.
Thanks for reading . . .
REALTOR® WINS HIGH PROFILE JURY TRIAL
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.
Tags:
agent sued over negligence,
carlsbad realtor lawsuit,
realtor lawsuit
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Tags: * Type of Content · Buyer · Consumer · Deceptive realtors · Disclosures · Humor · Industry · Mortgage · ReMax · Realtors who give the business a bad name · Transparency · Types of realtors
December 4th, 2007 · 9 Comments
It’s a sad world we live in. We kill several trees per real estate transaction, largely due to the increasing number of should-be-obvious-to-most-reasonable-people disclosures attached to every contract. At every real estate legal update (including the last one I attended before leaving Alain Pinel Realtors) we get regaled by stories about how a particular disclosure came into existence. The story usually has three high points:
- Person A buys a home from person B.
- Person A regrets buying said home.
- Person A hires clever attorney, who sues person B for not revealing that .
Case in point: The Public Schools Disclosure Impacted Schools disclosure, a double-whammy of sorts: a should-be-obvious disclosure wrapped up in a cryptic (and/or mis-worded) headline, now being used by several local brokerages.
Key clause:
…there is no guarantee that a student will be accepted in the proximate neighborhood school…buyers are advised to consult directly with the appropriate school district office to determine the availability of classroom space in the neighborhood of interest.
I’ll bet you this disclosure came into existence something as follows:
John and Jane sported 44 years of formal education between them — including at least three different Ivy League institutions — and an alphabet soup of credentials, including two MBA’s, a JD, an MD. They both had six-figure incomes (the first digit not being a “1″ in either case) and had stashed away $1M from years of aggressive saving plus some extremely lucky stock options.
John and Jane had a son, Joey, whom they were determined would have all the same opportunities they had, plus more. Though Joey was only 4 years old, they had already started on the application process for the Stanford, Harvard, and Yale classes of two-thousand-twenty-something. (Ok, slight exaggeration.) Part of the master plan involved sending little Joey to the absolute best schools available, and they just don’t make ‘em better (at least in California) than they do here in Palo Alto.
So…they bought a $2M house in Palo Alto, right around the corner from a school with an API score of 970.
Fast forward one year. Little Joey is about to enter kindergarten. John and Jane go to enroll him in the neighborhood school…and find out, to their horror, not only that Joey’s class is already full, but that their particular side of the street has been re-assigned to a different school! That’s right, a different school. Still in the Palo Alto school district, mind you, but the new school is a full half-mile away and (shudder!) the API score of said school is only 930 and the other kids going to that school come from the $1.5M-per-house part of Palo Alto.
Naughty, naughty! John and Jane should have done their homework. Arguably, their agent should have better informed them. And perhaps it’s not entirely unreasonable to assume (Benny Hill caveat to the contrary notwithstanding) that proximity to a school equals access to that school. However, given how important education was to John and Jane — you would think they would have done some friggin’ research of their own!
You know where the story is going. They head to their attorney, who looks over the transaction paperwork for a loophole. Aha! The sellers (maliciously) didn’t disclose that living in that home didn’t necessarily entitle Joey to attend the nearest school! Bingo!
What happens after the big lawsuit file arrives on the broker’s desk with a resounding (and expensive-sounding) thud doesn’t really matter as far as this story is concerned. Reasonable or unreasonable, dumb or not, win or lose…from now on, in every transaction, every agent, just to be careful, just in case…has to explicitly explain to his her clients that “proximity to neighborhood schools does not guarantee access.” To make sure they really get this point (and to reduce the risk of a re-occurrence of this lawsuit), they now have to also sign yet another silly disclosure.
Really, now, can’t we just all be reasonable?
When it comes to real estate transactions, I guess the answer is, tragically, no.
No tag for this post.
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Tags: Consumer · Disclosures · Industry · Palo Alto
I wonder if I may be making history here as the first person to ever be live-blogging a real estate legal update seminar.
Twice a year my broker, Alain Pinel Realtors, runs attendance-mandatory legal update seminars hosted by Bill Jansen of Broker Risk Management. Most of us look at these events akin to a trip to the dentist: painful, but necessary and perhaps even good for us. Fortunately the company provides a breakfast to get us all there on time — a fairly reliable ruse in the case of Realtors.
Bill does his best to liven up his talks with anecdotes, pithy lines, and the occasional joke. Some of his best lines today were on disclosure obligations:
1) Seller: “Do I have to disclose–”
Agent (interrupting): “Yes.”
The point? If there’s any doubt about whether something should be disclosed, the answer is “yes”. In legalese, everything material has to be disclosed, which is of course a subjective standard. Since the likely plaintiff in any lawsuit is a buyer, their interpretation of material could come back to bite you.
Disclose, disclose, disclose.
2) “What buyers learn before escrow, they forgive. What they learn after escrow, they sue.” Buyers hate surprises, especially expensive ones. Attorneys, on the other hand, simply luv ‘em!
——————–
Disclaimer: I am not an attorney, so don’t make any decisions or take any actions based on what I’ve written above. Consult your own attorney for advice related to your particular situation.
Tags:
Alain Pinel Realtors,
Disclosures, Legal,
Real estate
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Tags: Alain Pinel Realtors · Disclosures · Legal · Real estate
I've been waiting for the right opportunity to really push the envelope of online real estate marketing, and, well, it's here!
I'm working on a listing in San Francisco's Potrero Hill neighborhood that fits perfectly into this new online marketing world: it's slick, chic, and contemporary, will likely attract a younger and web-savvy crowd of buyers, and the sellers simply love the idea of creating a buzz online.
We're passing on the normal full-color ads in traditional local media like the San Francisco Chronicle, the San Jose Mercury News, and we'll be spending that money online instead. To hedge our bets, we will be placing open house display ads in print media.
I'll be collaborating with several real estate online marketing companies to promote this property. They'll be showing me — and, by extension, my readers — how to get the full benefit of their products. I intend to chronicle our adventures here and invite you to follow along. If you have some ideas, feel free to join in!
I'll announce the first collaborator tomorrow.
In the meantime, as part of our adventures, let's see how high this site currently ranks for the search, "San Francisco Potrero Hill Real Estate" — I suspect it won't be that good, since I've never written about Potrero Hill before!
Sure enough, on Google, Yahoo, and MSN, I'm nowhere to be found, not even in the top 100. 
Google:
Yahoo:
MSN:
Tags:
Advertising,
Buyer and seller tips,
Disclosures,
For sellers,
Google,
Media,
MSN,
Newspapers,
Online advertising,
Potrero Hill,
Preparing a home,
Real estate,
San Francisco,
San Francisco Chronicle,
San Jose Mercury,
Yahoo
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Tags: Advertising · Buyer and seller tips · Disclosures · For sellers · Google · MSN · Media · Newspapers · Online advertising · Potrero Hill · Preparing a home · Real estate · San Francisco · San Francisco Chronicle · San Jose Mercury · Yahoo
Monday morning geekage:
Hat tip to the White African for alerting me to Scribd, which is essentially Youtube for documents.
The premise is that just as people love sharing video, they might love to share documents they’ve created: school papers, poems, academic treatises, scholarly research studies…
I was skeptical at first about any potential real estate application, but then it hit me: This might be the perfect platform for sharing real estate disclosures.
Currently, at least here in the Bay Area peninsula, about 70% of listings have the (formidable) disclosure documents hosted online, almost invariably by a title and escrow company. Getting these docs online is usually as simple as handing them over to your rep, who gets them scanned in and uploaded.
Downloading them, however, ranges from the frustrating to the incredibly frustrating. Some of the sites take forever, while others are just really slow. Most of the sites have incredibly bad interfaces.
With Scribd, you could simply upload the documents, mark them as private (so they’re not searchable on the site, nor crawlable by Google), then simply embed them in the appropriate part of your web site. Several advantages come to mind:
- The downloads take place at Scribd, so they don’t count against your hosting provider’s bandwidth limits.
- The Scribd flash-based reader is way cool, with zoom in and out, view full screen, print, and download options. Prospective buyers can read the documents before deciding if they actually want to download them.
- It just looks cool!
One cool feature that may not have much in the way of real estate usefulness is the ability to get the documents read back to you in that rather annoying female monotone computer voice to which we’ve become accustomed. If you think disclosure documents are boring to read, try listening to them!
I’ll give Scribd a try on an upcoming listing and report back.
Geek out…
Tags:
Disclosures,
Industry,
Real estate, Scribd
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Tags: Disclosures · Industry · Real estate · Scribd
