Realtor Prevails in Nationally Watched Lawsuit

A few months ago, I blogged about a lawsuit involving a Carlsbad couple who were suing their buyer’s agent, claiming he failed to tell them about nearby homes that sold for up to $175,000 less than the one they ended up buying. At issue was how much responsibility agents bear for the decisions of their clients. Here’s the original post.

The national real estate community anxiously watched the case, knowing that if the plaintiffs prevailed, it would open the door for thousands of disgruntled homebuyers to blame their agents for their predicaments.

But agents could collectively exhale last week after a jury sided with agent Mike Little and not buyers Vern and Marty Ummel.  Maybe people able to purchase a $1.2 million home on a golf course don’t engender much sympathy, down market or not.  Here’s a portion of the Voice of San Diego story:

[T]he jury found that Little had executed a reasonable standard of care when he showed his clients, Vern and Marty Ummel, more than 80 homes in a house hunt that began in May 2005, ultimately leaving them to their decision to pay $1.2 million for their house two months later. In arguments delivered Thursday morning to conclude the jury trial that began last week, attorney David Bright said his client, Little, was being unfairly blamed for the Ummels’ house dropping in value.

However, some experts said the Ummels’ case succeeded in delivering a wake-up call.

Todd Lackner, a real estate appraiser not associated with the case, said the Ummels had “lost the battle but won the war” when it came to raising questions and delivering a hit to the reputation of real estate agents.

A common put-down of real estate agents compares them to used-car salesmen.  Well, one difference between them is this: People who sell cars qualify their buyers.  They won’t let someone buy a car they can’t afford, and they won’t sell a car to poor credit risks.  They also stand behind what they sell.

Real estate agents assume no responsibility for the fates of their clients after the sale.  Should they?  Maybe.  It doesn’t seem right that the National Association of Realtors can for years tell people it’s always a great time to buy when that clearly isn’t the case for many people.  Teaching people about responsible home buying (i.e., saving for a down payment; renting vs. buying, etc.) would be a good alternative to the one-size-fits-all approach to selling property.

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