You don't need to have your ear to the ground to hear the sharkish cry of "The Lawsuits are Coming" echoing throughout the real estate industry....is it time ....? It is another way that the industry has to improve their image by reducing the number of agents who are practicing outside their area of expertise ? OR....Is it unfair discrimination against realtors who try to "do the right thing" with short sales but have not been successful ?
The basis for the suits to come...in progress rallys around a variety of what may be called, "disclosure issues" or what others may term as "great expectations" by short sale sellers that may or may not be met in a closed transaction. These areas as we have heard them are:
- The entire deficiency was not relieved by one or more of the lenders involved
- The lender issued a 1099-S for the deficiency incurred by the short sale
- The agent offered legal or tax consultation .
- The agent practiced outside their area of education and expertise
- No other options were evaluated or proposed by the agent before doing a short sale
- No warning was given that the short sale would impact a seller(s)' credit score
Agents Beware...Sellers be warier....The Lawsuits are Coming....The Lawsuits are Coming !
Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS
Should this be a surprise?
Was Paul Revere a surprise ? Probably just like now...only to those who haven't bothered to tune in and turn on to what's happening...
Thanks for your post. Agents need to be very careful with short sale transactions. When the sellers have a problem, the first person they will think about is their agent.
It's inevitable...unforutnate but inevitable that attorney's get involved! Perhaps if all agents were honest with sellers and buyers...ahh wishful thinking!
Yup, it sure is inevitable...I love your title and pix of the post...you are so creative! How do you think of this stuff? LOL
Always recommend in writing that a short sale seller contact an attorney and a CPA prior to going forward.
You said it...in writing Dixie and Dick...all in the Scotch Kristin...Unfortunate we do have to feed the lawyers on occasion Laura..You bet Roy....the agents "catch it"...and sometimes...they should !
Sally and David: This may sound somewhat harsh ... but just think ... What would happen in other professions if they didn't mandate special certification or education for their specific professional services? Would society think that okay? Let's say ... someone acting and performing the services of a doctor, without the required education and licenses. Would we say "he/she meant well ... so no real harm. Don't be upset or prosecute them just because he/she let a patient die?" I don't think so!
Obviously an exaggerated example, but acting and being professional in our industry should demand a certain quality of service, licensing, and investment in our educations just as stringent as other professions and industries. Until we make such demands, the real estate industry will continue to see the reputation and credibility challenges it faces so often today.
You point this out eloquently ... not only in this article, but in prior articles as well. I applaud that ...
Gene
Thank you Gene...if we want to get beyond the "used car dealer" image we have to operate like professionals...including education and successful experience.
I don't do short sales and if a seller is in need of one I will refer it out. I like my life sans lawsuits!
Sally
What is even scarier is the idea that they will have a hole new array and style of ambulances. Watch the band wagon and wait until you hear the advertisements. bacteria looking to manifest and unfortunately taking it out on rel estate agents. Granted, I have met my share of some real estate agents that just don't do the right thing and pass along the short sale because they are not that well versed or experienced in them but I also see many good agents having to suffer at the hands of some loud "mouth piece"
What would be the "cause of action"????
The offenses listed are Realtor COE violations, not violations of the law.
If we haven't seen the lawsuits to date, I doubt that we will. A couple of years ago, I expected the same thing, but it didn't happen.
Consumers don't have the resources to pay for such lawsuits and what ethical attorney would take such a matter????
Sally and David, I haven't seen evidence of this yet. But it could happen. In some instances it may even be justified.