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