by Caroline Gabsewics
Staff Writer
It’s called the “subprime crisis” in the national media and things are still being sorted out.
One question is yet unanswered:
Who’s to blame?
Could it be you, the agent?
According to numerous sources, it isn’t likely but, in this litigious society, it’s possible.
A New York Times story is making the rounds in North Florida that could be a harbinger. A California homeowner named Marty Ummel is suing her real estate agent because she feels she paid too much for her house during the housing boom and she claims it was her agent’s fault.
While this was on the fringe of the subprime problem, the newspaper said that Ummel may be on the leading edge of the law but they are unlikely to be alone for long.
The newspaper said with the market falling, many homeowners owe more on their mortgages than their houses are worth. And many of those deals involved brokers who are required to carry professional liability insurance, presenting a tempting target for angry buyers.
North Florida agents — and their insurers — are watchful but nothing yet has popped up.
No cases have been filed in this area — at least, not within hearing of the Florida Association of Realtors and Northeast Florida Association of Realtors. Spokesmen for the two said they’re aware of potential problems.
The legal side appears to favor the agent.
Jacksonville real estate attorney Blake Deal III agrees that it is a possibility that Realtors and real estate agents may find themselves in a lawsuit because of the current real estate market.
But — and this is good news for the agent — it is going to be tough for the buyer to win.
Deal, a member of the Jacksonville firm of Bartlett Deal & Briley, explained some situations where a Realtor or real estate agent could find themselves at fault. But he also explained why a buyer who is suing their agent could find themselves in a steep uphill battle when it comes to facing a judge.
“When a person signs a real estate contract, it is between the buyer and seller. The agent is not a party in the contract,” said Deal.
If a buyer decides to sue their agent or Realtor and the case is brought to court, “Judges will say, ‘You signed the contract. And didn’t you agree to go to the closing?’”
In a case similar to the Ummel’s, where a person takes the position that they were misled into signing a contract by a Realtor, Deal said that’s going to be tough to win.
“When a person buys a house and they think they paid too much, and they are upset, they will say they were duped into signing the contract by their Realtor,” said Deal. “But a big impediment to the lawsuit is that the buyer signed the contract to buy that home.
“To sue a Realtor and say you were duped into signing a contract — to me, you are in a real uphill battle when you face the judge.”
Deal has gotten phone calls in the past year from people who are trying to get out of a contract they have with a condominium.
“The person says, ‘My Realtor told me the the condo will go up in significant value and I wouldn’t have to close on the condo and it could be flipped,” said Deal.
“The condominium market is down and the condo they signed a contract for is down in value. They want to get out of it,” said Deal. “If the buyer had some way to prove that a Realtor actually said, such as ‘The condo will go up in value and you won’t have to close,’ then they may have something, but the hard part is proving that.”
Deal said there is another way an agent could find trouble.
“I warn Realtors about making any representations to people that the property could be used for something other than its intended purpose,” he said. “There are covenants and deed restrictions that Realtors should know before they meet with a prospective buyer.”
But who is to blame for this?
“Of course, the current housing market has something to do with it,” said Deal. “But everybody is at fault.
“I am a firm believer that the person at fault in most instances is themselves.”