Home Buyers Lose Lawsuit Against Carlsbad, CA Real Estate Agent

I heard about this on the news as well. It is a freightening trend to say the least. I cannot see how someone can make the grounds for a case. They agreed to the terms and nobody can control the economy. What gets me is the potential costs of fighting off such attacks if others follow this lead and try to sue.

Very good news for the agent! I’m glad the comps were able to reflect that he agent did his job correctly :)

Again more people just trying to find some issue somewhere to cause a problem since maybe they dont like the home anymore or maybe a little buyer remorse? It just becomes ridiculous and I’m glad they lost….had they won who knows what may have been opened.

I wonder if anyone who interviewed them had thought to ask them if they should pay more if the home appreciated in value….as it looks like it did.

The only way they would truely verify if their home had appreciated would be to list it for sale and to put it under contract. I’m not saying the house has not gone up in value, but it seemed like the plantiff really lacked an understanding of features that added value to her home. I hope she doesn’t appeal.

There are always black sheep in another industry. There are no denying that there are agents that jerk up the selling price to get a bigger commission.

But the bottomline always lies with the seller and buyer. You have to do your own reseach and get a reputable agent before signing on the dotted line!

There is a fine line between buyers and sellers who “think” their home is worth a certain amount. Perhaps they should have sued the appraiser instead – and make sure you saved copies of the “comps” you shared with the buyers to save your neck!

I love when people try and blame someone else for the decision they made. It’s the American way. Isn’t it? :(

Personally I felt the same way about our real estate agent. However, we were paying her to be our agent and she actually convinced us that we would be in violation of the law to question or try to pull out. In our case I had wanted to sue the appraiser and the agent. Our agent allowed the selling agent to contact our appraiser. On a friday we received an appraisal for 500k. Two days later (after the appraiser talking to the selling agent) we had a er-appraisal (we didn’t ask for) for 525k. Explain that!

John

John, I’m a real estate agent but I am also a certified residential appraiser (although I’m not currently appraising).

One thing you can do is visit http://mortgagefraudwatchlist.org/

As an appraiser and an agent – I believe that it is very difficult to come to an exact value on a house – 3 different buyers can come up with 3 different prices that they are willing to pay. The difference in your case is less than 5% of the sales price – a number within reason — however doesn’t mean that you should not have this investigated.
The appraiser should not have spoken with anyone but the lender as in mortgage transactions the lender is technically the client. Rules keep getting tighter in this regard but there is a lot of pressure on appraisers to “hit the number”.

Wow, Thank you, I thought this thread was old enough it probably wouldn’t be seen. Why does an appraiser even know the number? Thanks for the web site. This appraisal change was exactly 5%, but what I didn’t like was that the comps used in the second appraisal were not even sold. My seller’s agent apparently convinced my appraiser that they would sell for a higher price. I never went back to check on how much they did sell for. In addition my house is beside what used to be a church office. I asked my agent to check on the property use and she came back and told me it was only suited to be a church office, had been for 30 years, and would continue to be. Less than a year later it is an accounting firm with much higher traffic.

Carolyn, I meant to ask, does it make any difference that we put a full price contract in at the 525 because my agent said to, it would never appraise that high. I realize now I should have said to pound sand, but I was paying her to be my expert so I signed. My only out was the appraisal value. When the 500 appraisal came out I said they could lower the price or we could cancel the contract. My agent then gave the other agent the number for the appraiser (when I kept saying I didn’t understand or like it and she said it was better that way). When the new appraisal came out all she said was I was stuck, had to pay or be in breach, and then she must have been getting busy with other people because I didn’t talk to her much after that until signing.

The only reason I brought this whole thing up after 3 years was because I saw Countrywide (my lender) being sued for tampering with the appraisers and didn’t realize this could happen.

John you have a lot of issues where answers could fall into legal advice which no one here is probably qualified to give.

Sometimes it is not as cut and dry as the appraiser just changing a number to make the loan, other times it is.

The appraiser is required to analyze the contract (the entire contract). If the appraiser has the contract they will know the sales price.

I really do believe that the value of a property is best expressed as a range rather than a single number but the forms appraisers are required to use call for A number.

Thanks for your help Carolyn. I think it is useless anyway as I am beyond the statute of limitations for fraud in some readings of the law even though the statute could arguably start today as I had no reason to believe there was anything wrong until I matched my funny appraisal scenario to the occurances showing up of purposefully bad appraisals. Still, I will seek legal counsel.

It’s not that I have to have the money back, although who couldn’t use it, it is really the sense of wrongness and wanting justice. I have talked to bunches of real estate agents who disliked the sellers agent and would not deal with him. Additionally, the fact that he invited my home inspector over to his house for beers when I stepped out of the house to take a phone call was downright dirty.

Thankfully in that case the home inspector told me about it later and said he won’t work for that agent because he doesn’t trust him. So who did that leave me to trust? Just my own agent.

Well, thank you for listening to me vent!

Out of curiosity, why does the appraiser need to see the contract? The contract has nothing to do with the value of the house!

The appraiser analyzing the contract is not an appraisal specific requirement but is a secondary market (Fannie Mae/Freddie Mac) requirement. Many times items of personal property, concessions, special financing are put into the contract – this could effect the sale of the property and the lender wants a nuetral third party to analyze the contract. Local appraisers should also be aware what is typical for the area and can also let the lender know if concessions etc. look out of the ordinary.

Since there is probably not a lot you can do about this – one way that might make things better is to make informed choices when you go to sell the house. I’m sure you will ask more questions, especially up front, about the process.

Hey John –

I’m late getting here. Really sorry to hear about your issues, and I’m very sorry that you had to deal w/ what sounds like is a very unethical agent.

In the future, make sure to use a good buyer’s or listing agent in your transactions. The keyword here is good – use someone who comes with plenty of recommendations.

Thank you all! It’s nice to just be able to say it, I feel so ignorant about it.