The Verdict is in...

This post is a follow-up to 'The Price is Right?' from last week, where a couple from North San Diego County were suing their real estate broker for his role in that fact that they paid too much for their home (to the tune of about $150,000!).

Below is the jury's ruling [from Friday, April 11, 2008] :

A jury sided Thursday with Carlsbad real estate broker Mike Little in a closely watched lawsuit that pitted a local couple against the agent that helped them buy a home. The couple, Vern and Marty Ummel, claimed that Little neglected to mention recent sales in their neighborhood, leading them to overpay by about $150,000 for their home in July 2005.

The case attracted national attention as it posed a hot question: What are the responsibilities of a real estate agent? The real estate camp was concerned that if the plaintiffs won Thursday, it would catalyze and focus a growing urge around the country to find someone to blame — and to hold financially responsible — when houses aren’t worth as much as their buyers once paid. Those who sided with the Ummels worried their case would be chalked up to rich people problems, a matter of a measly $150,000 in the scope of a million-dollar tract home near a golf course in North County.

With an enthusiastic and unanimous response, the 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.

Why did the jury decide to find in favor of the defendant (the real estate broker)?

At least in this specific case, the Realtor was found to have exercised sufficient care in helping the Ummels find their house, including helping them negotiate other offers they made on houses before they settled on this one. That made an important part of the case Vern Ummel’s admission on the stand that after looking at so many homes, he had a good sense of value in the neighborhood.

Conclusion

I was watching this case closely, because of the implications it could have had given the current state of the housing market. I have no doubt if this case had been found in favor of the plaintiffs, a slew of new lawsuits would ensue, where buyers alleged they were duped by their respective agents/broker.

In the end, let this be a lesson to all... As I've said many times, do your own research so that you can make the most informed decisions possible.