Real Estate Agent's Alleged Disclosure Failure Lands In Litigation

The NBC Today Show ran a story on, and an in-studio interview with, a California homebuyer last Friday who is suing her real estate agent for the agent's alleged failure to disclose market value information during the homebuying process that, according to the homebuyer, resulted in overpaying in the purchase of her home by as much as $105,000.

While NBC appears to sell this story as a lawsuit based on buyer's remorse, it seems clear to me that the reality is that the lawsuit is based, at a minimum, on the alleged professional negligence on the part of the real estate agent for failing to meet the legal duties he/she has to the buyer. Typically, the real estate agent has an obligation to disclose to the homebuyer upon first substantive contact whether he/she (the agent) will be representing the homebuyer (as a Buyer's agent - with heightened legal duties to the buyer), or the seller (as a Seller's agent - with lessened legal duties to the buyer) in the real estate transaction.

In this case, it appears (as too often happens) that there may have been some confusion as to what capacity in which the real estate agent was operating. If the agent was operating as a Buyer's agent, and the allegations in the lawsuit prove true, he/she may have a serious problem.

For more, see Home buyer who overpaid sues real estate agent (With housing boom going bust, will more purchasers follow suit?) (Go here to watch video).

For a related story, see Real Estate Agents' "Well-Kept Secret" Creates Havoc For Homebuyers.