Out of San Diego comes the news that the first legal action for "buyers remorse" has been filed. Some of the details are sketchy but basically the Buyer's think that THEIR agent withheld information from them (due diligence) and/or the appraiser "manipulated the appraisal" was the term the plaintiffs used.
The legal standard will be the same as any other suit against an agent/Realtor/Broker i.e. did the agent "willfully, deliberately and with malicious intent" withhold information? Disclosure. If it can also be shown that the appraiser "manipulated the appraisal" now you have a much larger case against the Broker and Appraiser which we call "fraud" or even "constructive fraud". This will involve loss of licenses and LOTs of money. I do not believe this will stand based soley on other homes selling for 10% less in a given time frame. (If it does, than maybe I can sue by clients for more commission when the value goes up faster than we thought it would!)
Some basic questions I would ask. What comparable properties/statistics were you shown prior to submitting your offer? On what other data did you base your offer? What was the time frame of the other closed sales that you say sold much lower? Did you not initial the mediation and arbitration clauses of your purchase agreement? Was "your" agent a LOCAL agent that truly knew the area/neighborhood?
We use an Agency Disclosure Addendum (not a CAR form) that includes the verbiage that it is not the Broker's responsibility to "set the purchase price of the property". The Buyers agreed to the price based on some data, signed a contract, wrote a check, proceeded through their inspection period, obtained through their bank an appraisal of the property (albeit potentially after close of escrow per the suit) and moved in. It was not until they got a flyer on their door handle that they found out about houses closing for less just down the street. Obviously after they had closed on their property. Perhaps during their escrow period (length?) the market was beginning to turn and the other sellers saw that. There are dozens of variables, mostly all subjective.
When working with Buyers I keep copies, electronic or otherwise, of all the comparables, Market Analysis reports (CMA's), and other data I present to my clients. Of course I guide them on their offer but based on all available objective data. I also make numerous sites on the internet available to them. It is all public data. I link too many different sites from my website DiscoveryBayGuide. The sites I link to contain sold information as well as Megan's law map overlays (PropertyMaps.com), demographics (PropertyShark.com), and various models that pull value (Trulia.com and Zillow.com.) YES some are better than other BUT it is all data that should be looked at and analyzed. I will NEVER be in a position of a client telling someone that I did not give them all the information I had available. As a professional, it is my job to guide my clients through the vast amounts of data in determining value. At the very least when I give an absolute opinion I use data to justify that opinion.
Caveat Emptor (Let the Buyer Beware) Ask questions! Ask for data and comparables. Ask for justification for your Realtor's opinions of value. Look on the internet, it's all there. You (Buyer) have a "due diligence" duty as well as your Realtor per the Buyer Inspection Advisory attached to your Purchase Agreement.
Caveat Venditor (Let the Seller Beware) (Sellers/Brokers/Agents) Offer all the available data both directly and on your websites. See my post "The Information Genie has Left the Bottle". CC (NOT BCC) yourself on all CMA's sent to your clients and keep these electronically.
"Coverus Ubuttas" (C.Y.A.) Disclose, be smart, be informed.
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