Property Crossroads - Real Estate Info

Is anyone accountable in real estate?

by Dan on January 27th, 2008

One of my recent, and most-read posts, started me thinking: When something goes wrong with a residential real estate purchase, who steps up to take the blame? Increasingly, the answer to that question seems to be ”no one.”

Last week, I wrote this post, about a couple suing their real estate agent after allegedly overpaying for their house. The couple claimed that their agent should have known that they were paying too much, and should have warned them against it.

The case is complicated. And it’s not clear whether the agent really did do anything wrong. But in a news story about the case, an expert witness for the agent did say something that bothered me: The witness said that it was the couple’s duty to make sure they weren’t overpaying for their house, not the agent’s.

My question: Why? Why is the agent receiving a commission check from the sale of the house if the agent — who was representing the buyers in this transaction, not the sellers — if he wasn’t willing to make sure his clients weren’t spending too much money? Isn’t this the least amount of service we want from a real estate agent?

Unfortunately, this dodging of accountability seems to be rather common in the residential real estate business. I have my own example. My wife and I purchased a nice little house in a suburb of Chicago about two years ago. Unfortunately, during heavy rain storms, our basement leaks, a lot. This wasn’t disclosed to us when we purchased the house.

Who’s to blame? The sellers, sure, unless, by some amazing coincidence the same basement that’s already flooded three times for me in two years never flooded once for them in 8-plus years. But what about our home inspector? We paid him to search the house for just this sort of thing before we bought. Unfortunately, when we called the inspector he denied accountability: He inspected our house during a dry time of the year. How was he supposed to know the basement leaked? Sounds lame to me, but that’s his excuse.

Next we tried our real estate attorney. Maybe he could help us retrieve some dollars from the sellers. He couldn’t. Trying to prove that the sellers knew the basement leaked would be too costly and time-consuming, and there was no certainty that we’d win our case.

So there you have it: We’re stuck with a leaky basement that we have to pay to fix ourselves. The sellers who more than likely didn’t disclose the problem and the home inspector who didn’t find it are sailing along.

Where’s the accountability? Maybe if there was more of it, the general public wouldn’t have such a dim view of real estate professionals.

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