agents start getting sued over market forces beyond their immediate control. This story in the REALTOR online magazine, culled from the New York Times, and also reported in the Seattle Times outlines a case where an agent (regrettably a RE/MAX agent) in California is being sued by a former client who state that he misled them into buying a home that they are now underwater on financially because values have been declining in their neighborhood. I fear that there will be more of these situations coming up in the next year or so as homeowners in markets that have significant value declines want to take their anger out on others; and it won’t be too surprising considering the masses of people that jumped into selling real estate during the boom years, as well as the number of people jumping into buying at the same time. There is bound to be some conflict coming in the courts.
This story isn’t clear as to whether or not the buyers thought their purchase was an investment or if they planned to live in the house for a long time, nor does it state if they perhaps had a major change of circumstance (job change or move) that forced them into selling shortly after purchasing. The devil is really in the details, which of course won’t be reported clearly, meaning we’re all left as the reading public to wonder what the outcome will be. From what I’ve been reading, many courts are putting tighter reins on buyers regarding these kinds of lawsuits with respect to forcing them to prove that there was an occurrence of fraud, coercion or otherwise.
As it relates to our own locale, the NWMLS forms used in the Puget Sound area have a lot of new language that specifically says to buyers that it is up to them to perform their due diligence when purchasing a property. We’re not back at the lowest days of “caveat emptor” (buyer beware) but it will likely get ugly for a little while in the courtrooms of America as the shift in the national real estate market continues and then settles back down.
