Make Sure your Buyer Agent Provides a CMA before making an Offer

by Steve Crossland, REALTOR in Austin TX on January 22, 2008 · 3 comments

The news snippet below briefly outlines a case in which a buyer is suing her buyer’s agent. The buyer feels like the agent allowed her to pay too much for the home she bought. I of course don’t know who is right or wrong in this particular case, ro all of the facts, and it looks like the courts will decide, but it does provide a good opportunity to discuss this.

When we write offers for buyers, we absolutely make sure the buyer understands the current market value of the home. Oddly enough, back in 2006/2007, during the really hot summer markets in Austin, we would often have to hold buyers back from jumping too high in multiple offer situations. It’s frustrating when you miss out on a deal or too, but I still think it’s wise to make sure you know that if you get caught up in a bidding frenzy, you can be giving away the next year or two of appreciation if you are not careful.

At present, the real estate market in Austin is stable but not frantic. There are pockets and areas spanning all levels of strength and weakness. Buyers have a bit more time and more homes to select from. We haven’t had many multiple offer deals lately. But when doing a CMA for an offer, we can be a bit more aggressive in coming in low.

As the article asks below, what are the responsibilities of a Buyer’s Agent? We think the main one is to make sure you don’t pay more than current market value for a home. Under no circumstance would we let a buyer make an offer without first providing a Comparative Market Analysis (CMA) for the home, which helps guide the offer price. The agent in the article below may have done that, and he will have a much stronger defense if it’s in writing. Maybe the market has backslid since the home was purchased. Otherwise, the buyer’s claim may have merits that are proven in court.

Disgruntled Buyer Sues Buyer’s Agent
What are the responsibilities of buyer agents? A case being tried next week in North County, Calif., Superior Court will help decide that question.

Buyer Marty Ummel is suing her buyer representative saying he hid information about what similar homes in the neighborhood were selling for because he feared she would back out and he would lose his $30,000 commission.

The defendant in the Ummel case is Mike Little, a veteran practitioner with RE/MAX Associates. He will argue that Marty Ummel, who brought the case with her husband, Vernon, is trying to shift the blame for the couple’s own failures of research and due diligence.

”They simply didn’t do what is expected of a knowledgeable, sophisticated buyer, and are now looking for someone other than themselves to take responsibility,” Roger Holtsclaw, an associate who was hired by Little as an expert witness, said in a court deposition.

The Ummels discovered after they moved in that neighboring houses with similar amenities had sold recently for as much as $100,000 less. Their original suit included the appraiser, who was accused of skewing his report to make the Ummel’s house seem worth the purchase price, and the mortgage broker. Modest settlements have been reached with both.

”I do not think I’m obsessive-compulsive, but I am 114 pounds of absolute perseverance,” says Ummel, who has spent a year picketing the RE/MAX offices on weekends.

Little called the case ”ridiculous,” adding ‘The lady’s a nut job. I didn’t do anything wrong.”

Source: The New York Times, David Streitfeld (01/22/08)

{ 3 comments… read them below or add one }

1 Tim January 22, 2008 at 2:01 pm

We were in a multiple-offer situation on the house we bought in December in SE Austin. Our agent talked us down about $5k. And we were almost 100 grand over comparables in the neighborhood.
That said. We also knew going in what houses in the neighborhood were selling for and had sold for thanks to our Realtor. We knew this house was well over that, and we knew why.
I don’t really understand how you could unknowingly be 100k over unless you saw the house driving by, found a realtor in the phone book to show you the house, and immediately put in an offer. It seems like if you see ANY other houses in then neighborhood you start to get a feel for price.

2 Joe Justic January 28, 2008 at 5:11 am

Ok here is the deal..

Now what happens if Mrs Marty Ummels lawyer looses the case and on top of it, and I hand hand her a flyer with a discount Lawyer that would charged her $25 thousand less??? in legal fees ? You can bet she would sue the first Lawyer……….

Well Mrs Ummel here is the Lawyer I would recommend to you, now this guy is a real winner !!! he is the lawyer for you, see him in action right here and now.->
http://youtube.com/watch?v=25eCZVhBQPc

by Joe Justice

3 Steve Crossland January 28, 2008 at 2:15 pm

Hi Joe,

I don’t completely follow your point, but I did like the movie My Cousin Vinny.

Steve

Leave a Comment

Previous post:

Next post: