Re: To address your private e-mail - Posted by JohnBoy
Posted by JohnBoy on July 13, 2003 at 13:07:57:
While it may never be the obligation of the agent to set the price, there are sellers that have no clue as to what their property may truly be worth. Many sellers put trust in the agent to advise them as to how much their property is worth.
So lets assume a seller calls on an agent to list their property. The seller has no idea what the true value of their home is really worth. The agent informs the seller that their property is worth x amount. The seller accepts the agent’s professional opinion that the property is worth x amount. The agent is suppose to be a licensed professional and know the fair market values of property in their area. Even if the agent is unsure, they do have access to pull up information to verify the market value.
So the seller agrees to list with the agent at the price the agent suggests the property would sell for, stating x amount is what the fair market value is. Then a buyer comes along and enters into a contract to buy at that price. Now the seller discovers their property is really worth a lot more than what the licensed professional agent has told them.
I agree the buyer should not be held accountable and their contract would be enforceable. However, it would seem to me that the agent was negligent and wreckless in telling the seller their property is worth x amount when it is really worth a lot more. If we’re talking about a property being worth $40k more than what the agent told the seller, where the seller has relied upon the agent they hired, that is gross negligence and wreckless on the agents part. This is one of the reasons an uninformed seller contracts with a professional to sell their property. They depend on the agent to provide them with factual information pertaining to the fair market value of their home.
So if the agent tells the seller their house is only worth x, and that is the price they suggest the seller list the property for, and the seller has relied on the agent’s professional opinion, being in the business of selling real estate, then it would seem to me the agent could be liable for negligence by grossly underestimating the property’s fair market value. The agent should have verified the value with comparable comps, which is readily available to agents. Failure to do so is gross negligence on the agent’s part in my opinion.
If this is the case, then it would seem to me the seller could have a valid claim against the agent for being negligent.
Are agents allowed to tell sellers their property is only worth $40k less than what it really is? Are they allowed to knowingly let a seller depend on their professional opinions as to what their property is worth when it is really worth $40k more? While it may be the seller that sets the listing price, in many cases that price is set on the recommendation of the licenced agent’s professional opinion, which in my opinion, the agent should be held accountable if their professional opinion is grossly underestimated. Especially if comparable comps that were available to the agent proves the property was listed $40k under market value.
I would find it hard to believe and agent could just tell sellers their property is worth $40k less than what it really is, when comps show otherwise, and then just say, oh well, you should have done your homework Mr. Seller. You were stupid to rely on my professional opinion. I just list the property. I’m not responsible for giving you false information, even if I knew it was false when giving it to you. I just wanted to get a fast sale. Next time, don’t be such a sucker!