Looks like I'm gonna get sued

Well in your position I’d back out and sue everyone in sight for the undue stress.

Looking at the dates of notification of fault defects and the times you were informed, plus the fact there was a chain of buyers and thus pressure to force a deal through along with the various conflicts of interest, and the close relationship between intersted parties I think that there must be a good chace of a succesful claim.

Go to the that second legal brief with the documents along with a calendar of events and see what you see.

We’re going in on Monday to talk to our lawyer again.

The papers we got last night were a statement of settlement, outlining all of the charges, taxes, etc. We saw on there that they had gone ahead (without our permission, of course) and signed us up for hazzard insurance, and a bunch of other things as well. The papers were faxed from the title company, so I’m assuming it’s their way of getting all of their ducks in a row to get us to pay the closing costs. The settlement papers were not signed by the homeowners, so I’m assuming that they didn’t show up for the closing either. Hell, we didn’t even know what time, or where the closing was being held, so I can’t think we would be held responsible for this.

The papers we signed at the mortgage company with Mike’s sister seemed to be pretty straight forward application-type documents. We did not sign a power of attorney, or anything like that.

We’ve already worked out a semi-timeline, outlining all of the things that went wrong with this. After Mike threatened to sue us over the phone, we took a tape recorder along on our last meeting with him. I don’t think we got anything good on tape, however. It’s really hard to hear, and I doubt it would be admissable anyway, since Mike was unaware he was being recorded. We just did it so we could remember exactly what was said at that meeting.

My mother says to go to the realty board and file a complaint with them, which, if this becomes an actual lawsuit, I fully intend to do. Proving Mike was a piss-poor representative would be very easy. I’d hate to think of another couple of saps like us get sucked into a mess like this because of him.

The couple had agreed to do the repairs, but they were being shoddily done, which, according to our contract, we had a right to reject. We asked Mike at our last meeting if we had the right to new estimates (which he had told us when we signed the origional contract that we did.) He hesitated and said, “Well, you HAVE estimates right here.” Hubby replied, “That’s not what I asked you. I asked you if we had the RIGHT to ask for new estimates.” Mike thought for a moment, and said that the estimates that we had here in front of us were fine, and that we would be unreasonable if we asked for more since there was only one company in town that did foundation work. (The phone book seems to have several, however. Five, in fact, and the contractor they chose is not listed.) He never did give us a Yes, or No answer.

Our biggest problem with this, however was that the repairs weren’t going to be done until after close, which would negate our option to approve of the repairs. After all, you can’t approve of something that you won’t be able to see for another six months.

But when I was thinking about this last night, what made me the most upset was that I had really thought that Mike was on our side. We drove three hundred miles three times to look at houses. There were a couple I liked, and Mike would say, “Oh, no, you don’t want this one. It has a problem with this and that.” So I thought, “Hey, this guy cares! He’s not just out for a sale, he wants us to get a good house.” When we looked at this one, he told us that he thought the house just needed a little “lipstick and rouge” and that everything would be just fine. We were so exited. The price was very low, which I thought was just because it was decorated so badly, and needed kitchen and bath updates. We could comfortably afford it, and afford to make the updates it needed, too.

Mike tried to talk us out of making anything but a full-price offer, saying that the homeowners wouldn’t budge on the price. We insisted, and they did come down a little. He tried to talk us out of asking them to fix these things, saying that they wouldn’t do it, and if we wanted the house then we should just ask for a few minor repairs. Again, we insisted, and argued with him until he put in the approval clause we asked for.

He might not have known about the bad foundation, the holes in the roof, and the bad wiring. That I don’t blame him for, because it’s possible that he didn’t know until it was inspected, but what I do blame him for is withholding the estimates once he got ahold of them, and making everything sound easy to fix. I also blame him for trying to intimidate and bully us into buying the house, and refusing to allow us to invoke our clause, when he knew we’d put it there for our protection in the first place.

handy . . . are you saying that the realty board can’t do anything about this? I thought they were sort of a watchdog group over the industry, and had at least some power over agents. If not, who would I address my complaints to? I just don’t want this to happen to someone else.

I am a commercial real estate agent and a Realtor and a CCIM (never mind you don’t want to know) licensed in Maryland and Delaware. Your story was a typical we-said / they-said real estate conflict story until the closing part. Granted, state laws can often differ considerably but to close on the deal against your express instructions is nigh unbelievable.

There are two primary issues here.

1: What the contract and associated addendums say. Based on your description(s) of what happened I am surprised that the Lawyers you have conferred with were not more positive with respect to your position. If (as you have indicated) the contract specifically called for your approval of the scope and manner of the negotiated repairs and you did not give such approval, the terms of the contract have not been complied with and there is no “deal”.

2: Mis-representation. If your description of what your agent said/did is accurate and can be verified he is likely to (and should) lose his license. Oddly enough you might glad in a way that the deal closed against your instructions. This opens up the real estate agency and the closing agency to HUGE liability problems and tips the balance in your favor as far as them paying to make the problem “go away” on a cheap little house.

As a side note are you sure there’s not something you’re leaving out. Closing against your instructions boggles the imagination.
Per Handy’s comment the real estate licensing board and the Realtors Disciplinary Board are two different entities. Even if Mike is not a “Realtor” you can most certainly seek relief and action from the state licensing board. While a “Realtor” is held to specific ethical requirements per their designation a (non-realtor) real estate agent is also held to specific standards in order to hold a real estate license.

I don’t buy Mike’s position at all, seeing as he will be on a percentage,

Nothing to stop you from trying a lower offer was there.

Nah, just looks more fishy all the time, I would not be surprised if he knew them quite well.

As an experienced guy he would know exactly how bad things were, the cost, standards of work etc.

There will be other places around at least as good, its hard once you set your heart on something but I wonder how many others have been stitched up by him.

Don’t bother hiding the recorder. If he’s unwilling to talk to you while being recorded, don’t talk to him.

Sounds very very shady to me. Article 2 of the National Association of Realtors’ Code of Ethics says that “Realtors shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. Realtors shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.” Confront him on tape about his behavior and ethical obligations and demand an explanation. Make him aware that you can report him.

A lot of buyers, unfortunately, believe that the broker is on their side. While he is bound by industry ethical rules, his primary obligation is to the seller, since the seller will be paying his commission. Even if the broker spent more time with you than with the seller, he’s really working for the seller under the traditional view. The traditional view is much criticized and undergoing change, but at the moment things are still in flux, so to speak.

It is the affirmative duty of the broker (representing the seller) “to conduct a reasonably competent and diligent inspection of the residential property listed for sale and to disclose to prospective purchasers all facts materially affecting the value or desirability of the property that such an investigation would reveal.” Easton v. Strassburger, 152 Cal. App. 3d 90, 199 Cal. Rptr. 383, 46 A.L.R.4th 521 (1984). The problems you talk about are precisely the kinds of things for which a competent broker would look. The responsibility for discovering the defects was his. I’d say that keeping the estimates from you amounts to the “concealment of pertinent facts” prohibited by the Code of Ethics linked above.

I’m not a lawyer and this isn’t legal advice, but just some stuff I thought you might want to know and think about. I’d highly advise readint the Code of Ethics and seeing where the broker may have overstepped his bounds.

Believe me astro, I’m just as incredulous as you are. When we closed on our old house, there must have been 20 documents we had to sign. The only thing I can figure is that A) something VERY rotten is going on in the state of Denmark, or B) a “statement of settlement” is not the same thing as a close. Neither party has signed it. It’s a two-page document from the title agency, listing the house price, taxes, the hazard insurance, commission, what the sellers net is, etc. When I first saw it, I turned to Hubby and said, “My god, you don’t think they gave them a check, do you?” He said that no, he couldn’t immagine that they could do that. My response was that considering all of the other things that are happening that we never could have immagined, you never know.

The first lawyer (the one we’re going back to) seemed to think we had nothing to worry about. He took our side on the matter, and said that Mike had royally screwed up. The addendum that we signed outlining all of the things we wanted to fix referred to the wrong item in the purchase contract. The homeowners sent back another addendum, which they signed (we did not) stating that they would have certified checks for the contractors, and they agreed to have these things fixed as per OUR addendum (which, I guess, implies that they accepted the approval clause). Hubby wonders if the second addendum could be considered a counter-offer.

We haven’t spoken to Mike since the last meeting that we tape recorded. Our attorney advised us to write a brief letter stating that the deal was off, why, and that Mike, nor any other member of the agency, was to represent us in this matter, and to refer any further inquiries to our attorney. The attorney advised us to hand deliver it to the agency, and to give it to the owner. The owner wasn’t there, but we did give it to his secretary. We gave a copy to our attorney, and kept one for our records. He advised us not to speak to Mike.

When we went to see the house for the first time we could tell from the outside that the roof needed replacing. It was pretty old. We accepted that, and were prepared to put a new roof on at a later time. Mike told us that if we had it sealed, it would last another two or three years. When we went into the basement, we couldn’t see the entire thing, because the door that led to the space that has the problems with the foundation was blocked off. The door had plastic sheeting that had been tucked around it, and no matter how hard we pulled, we couldn’t get it to open. Mike said not to worry, that the inspector would be able to get back there. The inspector, when we spoke with him personally, said that once he got the door open, he wasn’t able to inspect the room thououghly because there was a lot of debris in there. Old plumbing parts, pipes and stuff. But he said that it looked like the foundation was pretty bad back there, and to insist on an estimate for repair. Mike got the estimate, said it would be relatively easy to fix . . . all it needed was a beam, and a poured wall, and well, you know the rest. We still, to this day, haven’t seen a written estimate for the foundation.

We had an estimate done for a B-Dry system to be put in the basement. The inspection report said that the walls were pitted and chipped from exsesive moisture. Mike said that the walls were fine. It was just the sealant paint that was chipping off. When we talked to the B-Dry people, they said that once the basement was dry, the walls would most likely begin to crumble. Mike insisted that they meant that the sealant paint would crumble, not the actual walls.

The inspection report came back that there was knob and tube wiring in the attic. We asked Mike if that meant there was knob-and-tube in the walls. He said that no, there wasn’t any. We called the inspector, who said that if it was still in the attic, there was a good chance it was in the walls as well. We asked that it all be replaced in our addendum. Mike called and said that the homeowners said OK, they’d remove it all. We got back the estimate (36 hours before closing was supposed to happen), and it said that all knob-and-tube would be replaced, except that which required that plaster be removed. That’s when we told Mike what the insurance company had told us, and he suggested that we act like it wasn’t there, because, after all, they wouldn’t CHECK, now would they?

Doean’t that void our contract as well? If we can’t get insurance to cover our house because of code violations? One would think that the mortgage company would refuse to loan to us if we couldn’t get insurance for the home.

After a LOT of looking, this was the only house that I liked. The housing market around here is crazy. My old house that I just sold in anotther town would sell for fifty to seventy five thousand more if it were here, in this town. I kid you not. People want exhorbitant prices for ugly little houses with tiny rooms, and no yard. That’s why we were so thrilled when we found this one.

Mike told us that he had sold it to another couple only a week or so before we saw it, but their “financing fell through.” He implied that we’d better hurry up and make an offer before they scraped the money together.

Mike was supposed to be the best agent at the agency. Our relator in our old town works for the same agency chain, and called down here to find an agent for us, and told us she had asked for the best. Mike called a few days later, and faxed us up sheets on a bunch of different houses. I thought he was great. He seemed so nice and helpful. We never saw it coming, but trust me, the next time we even THINK about making an offer on a house, we’re going to have a lawyer in tow, looking over our shoulder every minute.

Not speaking to him is good advice, but rather than hand delivering, you should have sent the letter (and any other letters you might have to write in the future) by registered mail, return receipt requested. That way, someone will have to sign for the letter, and you’ll have written proof that they received it. When you get the receipt, attach it to a copy of the letter (which you kept, right?) so that you know what went with what.

What a train wreck!

Holy crap! I just read this whole htread and a few things really stick out:
1)Hubby and I were in negotiations to buy a house. The same agency is reperesenting us, and also representing the seller. This is the first mistake! If you and hubby were getting a divorce, would you share a lawyer??

2)**Here’s the kicker . . . the loan officer is Mike’s sister!! ** How many people live in this little place?? Is Mike’s Dad the sherriff? You said your folks know the people at the agency…

What is in this little place that makes it so worth moving to? Do you guys have new jobs there? I dont get it.

3)**I agree, Wump. I’d rather settle this over a cup of tea around the coffee table with them, and forget this ever happened. I’m just trying to protect myself by getting a lawyer, just in case they want to sue me. **

Oh my god! you are going to get so totally screwed! Retain the lawyer - start some legal action! MY GOD! These people ar eNOT to be trusted! Mike tried to sell you a lemon of a house at MAXIMUM price to get a good commission! You cant trust him, or his bloody agency! Sue them for a dollar if you have to, but start a legal proceeding! If you wait until they act, then you look like you are just retaliating.

I would reconsider moving to this place if I was you… if sounds like a creepy TV movie of the week…with a BAD ending.

Good luck.

This is why I was confused about your prior panic that they had settled without you. Based on your last message it sounds like these might just be the “settlement sheets” being sent to you for your pre-closing review. This is typically done to allow the seller and buyer to review the proposed list of closing charges and make sure they are listed correctly. Unless there is a copy of a deed or some sort of other confirmatory paperwork attached to the settlement sheets it is unlikely that the deal “closed”.

The settlement sheets usually need to be signed and a host of other (mostly loan related) paperwork as well. If you have not signed any of this stuff, (especially the deed or similar instrument) you have normally not “closed”.

As a last point you may have made a serious mistake taping “Mike”. Depending on your state laws in some cases taping people without their knowledge can be legally hazardous. Do not say anything to “Mike” about a tape before checking with your attorney.
If things went down as you related I really wouldn’t worry that much. The one that should be worrying is Mike’s broker the “family friend” as the brokerage agency is the one that will really get smacked (in addition to Mike). With a good lawyer you should be able to get out this whole and have the brokerage pay your legal costs.

As an aside you also need to be realistic in the future about real cheap houses. When I put together contracts on re-hab commercial properties I always specify that beyond whatever due diligence the Buyer wants to perform, the property is being sold “As Is” to prevent these kinds of problems. If repairs are necessary and reliable estimates to repair are available I usually counsel buyers to simply adjust the price and do the repairs themselves as the PITA factor for a stressed and anxious seller coordinating to get these done is higher than for a buyer looking for a deal. Older houses with serious structural and foundation problems are generally not bargains in the long run irrespective of the price.

I would also not put too much stake in the notion that “Mike” as an experienced agent is necessarily going to be required to be knowledgeable about the intricacies of the necessary repairs. I know many compentent and successful residential agents and they are not structural engineers or home inspectors. They are sales people. I’m not defending Mike but unless he is representing himself as an expert in these areas the “you should have known argument” is not likely to carry much weight.

I don’t usually generalize (see), but my experience with real estate people is that they are the lowest form of life in existence–they have to spend time in a monistary just to reach the level of grace and moral character of a lawyer.

Lissa, you must, must, must sue the tar out of this guy. Call the state licensing board, the better business bureau, and the local TV staions. Name his sinister sister in the suit.

Because you are probably not the first buyer this tandem has screwed. If you do not make a very public stink about this, you will not be the last.

He is evil and must be destroyed.

kellibellie-- We’re moving back to my hometown. It has about 30,000 people in it, but it’s a sort of tight knit community. Everybody knows everybody, or at least knows somebody who DOES know them. Hubby got transferred back here in a new position, and I got my old job back. I was actually pretty happy about coming back here, because, well, I know everybody, and everybody knows me. All of my friends and family are here.

Whew!!! I was hoping you’d say that! Do you think we’ll be responsible for any of the costs?

That’s exactly what I thought. We never mentioned it to anyone, not even the attorney, since I don’t think there’s anything on there that would help us anyway. We just wanted to have it so we could remember what was said.

I really do hesitate to get the family friend involved in this. If we have to take action, I would only want to take action against Mike, as a seperate entity from the agency. I don’t know if this is possible, but I would really hate to drag the friend into this mess, considering that he has always been very fair and honest with my family in the deals that they have made with him.

What I’m really hoping for is that the home owners will ask for the earnest money, and we can work out some sort of agreement that if we release it to them that they give up any further rights to litigate against us. I would consider it $500 well spent at this point. Then we would only have to worry about the title agency, although I can’t see how they could get any money out of us considering that we did not actually buy the house.

We put at the bottom of the letter that it was hand delivered on such and such date. In retrospect, I wish I had had the secretary sign for it, but it was silly me, trusting people again. We kept a copy for our records and gave one to our attorney. The attorney didn’t seem to think that registered mail was necessary, and neither did I. The agency owner is not the kind of guy to pretend he never got it, and as rotten Mike has been to us, I can’t picture him interefering with its delivery. But then again, I could just have my head in the sand. The owner of the agency called that evening to talk with my family, and made the statement that he hoped this wouldn’t ruin our relationship with them, and that if Hubby and I wanted to, he would be happy to show us other properties.

ahhhh… hometown. Gotcha. Makes sense now.

Again, good luck.

No it’s not really possible. The brokerage is the legal entity responsible for the actions of it’s agents even though they are (typically) independent contractors. They will be part and parcel of any action you take against “Mike”.

Here is some free advice re proceeding with your legal action. There is no “nice” way to do what you need to do to terminate this contract as no one other than your lawyer seems to be paying attention to you. If you are going to waffle do not proceed. You are going to have to take the agency and potentially the sellers to the mat unless they can make the problem go away. Under no circumstances should you lose your deposit based on what you have told me. If you go into this wanting to make nice and have everything be as friendly as possible you will be “handled”.

Your contract is null and void and Mike, and by extension the agency, is acting as if it is still in place and enforceable. If things are exactly as you have represented them a 10 minute conversation of your lawyer with the Real Estate agencies manager (or lawyer) and the Sellers lawyer should be sufficient to make the issues clear.

I quit reading about halfway thru. First of all, while IAAL (I am a Lawyer), this should not be considered legal advice. Call your own attorney.

You haven’t had a closing. There is no way in HELL you could close on a house without you a) being there and b) signing 36,573 kajillion documents.

Also…

Your agent Mike sounds like a scumbag that is willing to do or say anything to collect his 3 (6?)%.

As I said earlier, I quit reading about halfway through because I wasn’t willing to continue following all the convolutions.

My suggestion, however, is that you call a reputable, disinterested attorney to sort this all out for you. It could prove to be a couple of hundred bucks VERY well spent.

You might also call your state’s real estate commission and the corporate home office of the real estate company.

Lissa, you are in such good hands here. Just do as the nice people say…

PS: Hang in there, you are doing everything right (except the tape recorder thingie).

I Am A Laywer.

And were I in your situation, I would hire myself a lawyer, one who specialized in real estate transactions, and tell him everything, and follow his advice.

You’re playing with serious stakes here. Protect your interests.

  • Rick

“I would hire myself a lawyer”

Ah, why not hire yourself ? :slight_smile:

Frankly, Lissa, there is no ‘local realty board’. There may be a local Realtor board [notice that big ‘R’?].

You can file something against a real estate agent with the national real estate licensing board & you should hear back from them in about 8 months to a year, if ever.

I remember some training literature for agents. It said to complete all selling forms even if the person isn’t interested in buying the property. I wonder if they did that & someone found the forms who should not have?

I want to thank all of you for your support and advice. You have all been very generous with both, and it means a lot to me. You guys are the greatest! I’ll keep you posted on any further developments.

Again, than you so much!

You have said that you have “spoken with a lawyer.” Haven’t you contracted for him to represent you in this matter? If not, why not? Were you going to do the close without a lawyer? While a simple, straightforward purchase isn’t that tough, if the property is suspect, or the sellers are less than upfront, having a lawyer may be the best 500-750 you’ve spent (and minimal cost compared to the total purchase price). At this point, this is far from a simple, straightforward purchase, and you need legal representation (not the good will of your friends here. You have that without asking!)

I am confused when you say the lawyer tells you to write a letter. Fuck that! Writing letters is what lawyers do best! Tell the lawyer you want out of this deal, and he has to do whatever he can to get you out of it, while minimizing your exposure. It will probably cost you some $, but chalk that up to experience. This is a fucked up situation. And, as unpleasant as it might be to hear, acknowledge that you have some responsibility for letting them get to this point without your interests being adequately protected/represented. Don’t expect to get out of it unblemished.

I cannot imagine the scenario where a house could close without the participation of the buyers in some manner. Again, don’t ask us, ask your lawyer. And don’t just ask lawyers, hire them to represent you.

And in the future, don’t commit the error of falling for one house - especially one with clear problems, and hinky dealings such as this one. There are lots of houses out there (even in a community of 30,000.)