An Interesting Legal Case about Real Estate

Remember when I predicted that buyers in depreciating areas would show up in court, suing the Realtors?
This case involved a couple who bought a home in a coastal Carlsbad community in 2005for $1.2 million. They regretted their purchase when they discovered that two other homes sold for about $150,000 less than theirs. They sued their real estate agent for negligent misrepresentation and breach of fiduciary duty. Their lawsuit grabbed national attention, given the recent downturn in the real estate market.
After only two hours of deliberation yesterday, the jury unanimously vindicated a buyer's agent accused by his clients of failing to disclose that two other homes in the neighborhood sold for less than what they paid. As a trial court case, this decision in Ummel v. Little is binding on the parties to the case, but has no binding authority for other cases. Moreover, the buyers may file an appeal.
At the trial, the agent's attorney argued that there were valid reasons these two other properties sold for less. One home, for example, had a lap pool which was unappealing to many buyers, and the sellers wanted to rent back the home for two years.
There are so many variables in a real estate sale: condition of the houses, upgrades (or lack of them) and terms, such as the long rent-back that the sellers wanted in this "comparable" sale. I don't know of any buyers who would grant a two year possession after close of escrow without a major concession in price. For one thing, a lender would treat it as an investment purchase and jack up the interest rate.
We usually provide a buyer all the information about neighborhood sales, along with the details, and let them make the decision.