Are auctions open for being sued?

[Tom Kirkham]

Is Barrett Jackson (or any other auction house) open for a law suit when they say "This car is way under market value!" someone bids on the car, and then the car depreciates?

I would have thought no but...

Unhappy home buyer, feeling misled on price, sues agent

[1985 CCX]

It sounds like you might have a point!

Too bad we are such a "Sue" happy society. It sounds like people need to do a bit more investigation regarding their purchases, at least to me. I always understood that a broker represents the seller and not the buyer?
Thus buyer beware!

[RodKnock]

Buyers always look for someone to share their pain when the market depreciates, but when the market appreciates and you ask the buyer to "participate" in the upside, then they just laugh at you.

Ultimately, it depends on how the agency agreement between buyer and agent reads, if there is one, but generally the listing agent and selling (buyer's) agent have only a responsibility to the seller. At least here in CA.

Regarding the auction houses, anyone can be sued, but I read an article in Keith Martin's Auction magazine a while back about a similar problem and the auction house's agreements are quite massive and protect them from most stones thrown at them.

[imagine2frolic]

I had a real estate agent when I bought my home. The seller had their own agent. He represented me, and because he did he got half of the commission. I would think that he would carry a legal responsibility to me?

Now that I have a lease with an option to purchase. My agent, the same, handled everything, and because of this the buyers saved what their agent would have made. They came with no agent.

I would think in the case of the car auction it would be BUYER BEWARE as 1985 stated.

[Cashburn]

How do you define market value? I believe that is the question. If someone spends $250,000 to build a street rod is it fair to call it $95,000 market value if you cannot technically build it for the money?

You are the ultimate judge, don't want it at that price... don't bid it at that price.

[RodKnock]

Originally Posted by imagine2frolic

I had a real estate agent when I bought my home. The seller had their own agent. He represented me, and because he did he got half of the commission. I would think that he would carry a legal responsibility to me?

That is not how it works in CA. Each state is different. In CA, the Agency forms are clear about whether there's one or two agents in the deal. Although the buyer's agent (called the selling agent) "represents" the buyer, the selling agent is being paid by the seller. The buyer does not pay the selling agent, and this is disclosed to both buyer and seller in that huge stack of forms that buyers and sellers sign.

[trs900]

I always advertise saying great deal compared to others.. in these times people are looking for deep pockets to invade, not mine as they are turned inside out at the moment.. like the others said anyone can sue anyone for any reason in this country and it only cost $65 for small claims here in Fl under $5000 I think.. some countries the loosing party pays all costs.. keeps law suits down very interesting suit about the real estate

[patrickt]

Originally Posted by Tom Kirkham

Is Barrett Jackson (or any other auction house) open for a law suit when they say "This car is way under market value!" someone bids on the car, and then the car depreciates?

I would have thought no but...

Unhappy home buyer, feeling misled on price, sues agent

In Virginia, "puffing" or "by-bidding" or shenanigans by the auctioneer gives the buyer the right (both under Virginia common law and the UCC) to either void the sale or to take the item at the last good faith bid prior to the completion of the sale. But you generally have to move with dispatch if you think you've been screwed at an auction -- waiting around to see if the car depreciates would probably kill your case. (And real estate is an altogether completely different matter at that).

[REAL 1]

What was the value at the time of representation?

If it depreciates later thats different.

[RodKnock]

Originally Posted by patrickt

In Virginia, "puffing" or "by-bidding" or shenanigans by the auctioneer gives the buyer the right (both under Virginia common law and the UCC) to either void the sale or to take the item at the last good faith bid prior to the completion of the sale.

Maybe that's why the auctions are held in Arizona.

[Anthony]

You can sue anybody for any reason, without being held accountable for incurring costs for others. The lawyer's, I mean legislature, designed the system that way.


From the above link

Vernon Ummel, an administrator at Dominican University, gave her his permission to pursue the case, on one condition: "Don't tell me how much the legal fees are." So far, the bills come to $75,000, more than Marty Ummel's annual salary as a fundraiser at California State University-San Marcos.


Who is always the winner? I need not say. The system is designed to do exactly that.

[REAL 1]

If you can come up with a better system we're all ears.

There are safeguards for frivilous litigation that provide for sanctions and fees to be awarded, Federal Rule 11 for one and State frivilious claim statutes.

We left the English system behind because our system is better. While everybody loves the idea of loser pays you'll love right up to the point you feel you have a case and have suffered damages and then become concerned about pursuing it for fear of losing and being stuck with the tab or until you get sued and are facing damages and counsel fees despite you belief you did nothing wrong and regardless of how meritorious you position was. Its a system that sounds great until your a$$ is on the line when you are sued or you want or need to bring a claim as a plaintiff. And for those that disagree, if you are ever or next time you are in a suit just suggest "loser pays" see if there are any takers.

[Rick Parker]

The listing agent represents the seller. The purchasers agent represents the purchaser. They split the commission. The ideal situation for the agent is to be the listing AND selling agent.

[Fred Z]

There are some circumstances that pertain here.
first......in calif....most CAl Assoc. Realtors forms include the form......(Market Conditions) which contains the wording......in brief....that informs buyers and sellers that the choice is theirs to decide, and that no guaranty can be offerd to offset their responsabilty to make that decision.
Further, we at my Corporate company....have a seperate form that we provide buyers and sellers that statess" As a result of changing market conditions , it may be difficult to secure appraisal reports that support the current market prices.
The ultimate decision of what amount to offer on any given property rests with you, the buyer. There can be no guarantee that the current proces will be sustainable as the current market conditions change. You need to decide what you ae willing to pay for the property in light of the market conditions, your housing needs, and your own financial resources. You also need to decide what type of offer youare willing to make in recognition of these market conditions.
I would imagine that the Realtor in this case, did his due diligence and had those forms signed. If so, though not a done deal, the suit will be tough to prove and be real in courts eyes.

I work in a very high end market in Manhattan and Hermosa Beach...so, I make sure all my clients are protected and aware of all situations.
fred z

[4RE KLR]

yes, however if the broker misrepresented the value of the property then they have in fact "placed value" on the property and are therefore liable for the misleading information. That is they have breached the confines of the arms length transaction.

The brokers are not appraisers, in most cases appraisers. Yes, I know some are but most are not. But when they set a value they are responsible for being able to support that estimate.

Now does that mean if the value changes after that date they are liable. No they are not. Appraiser's determine value on that day at that given time. Any market fluctuations that may take effect after that date are not the responsibility of the appraiser nor the broker.

[427sharpe]

Having sold 3 cars thru B-J over the years, the riders attached to the contracts are like encyclopedias. One of them says basically that B-J will perform to the best of their ability but cannot assure that cars are not misrepresented or over valued at time of sale. It puts the onus on the seller to prove provenance and the buyer to do adequate homework. B-J has been around a long time, and been sued a few times. I am sure that they have done their homework to insulate themselves from a litigious buyers remorse. If you recall, last year somebody was going ape caca over their car getting hammered early...went to court...lost due to taglines in the contract. I would be more interested in seeing how many cars are 'shilled' to fan publicity flames and whether B-J has prior knowledge of same.

[Tommy]

Originally Posted by REAL 1

If you can come up with a better system we're all ears.

There are safeguards for frivilous litigation that provide for sanctions and fees to be awarded, Federal Rule 11 for one and State frivilious claim statutes.

We left the English system behind because our system is better. While everybody loves the idea of loser pays you'll love right up to the point you feel you have a case and have suffered damages and then become concerned about pursuing it for fear of losing and being stuck with the tab or until you get sued and are facing damages and counsel fees despite you belief you did nothing wrong and regardless of how meritorious you position was. Its a system that sounds great until your a$$ is on the line when you are sued or you want or need to bring a claim as a plaintiff. And for those that disagree, if you are ever or next time you are in a suit just suggest "loser pays" see if there are any takers.

It's refreshing to hear the perspective of someone who has nothing to gain from defending the current "ambulance chasing" system. ... You're not a lawyer, are you?

[Slick61]

... caveat emptor...

[1ntCobra]

Originally Posted by imagine2frolic

I had a real estate agent when I bought my home. The seller had their own agent. He represented me, and because he did he got half of the commission. I would think that he would carry a legal responsibility to me?

Now that I have a lease with an option to purchase. My agent, the same, handled everything, and because of this the buyers saved what their agent would have made. They came with no agent.

I would think in the case of the car auction it would be BUYER BEWARE as 1985 stated.

I have only purchase 2 houses and sold 1, but I doubt the rules have changed since those sales or that the rules are very different in other states.

The normal real estate agent that you find to shows you houses is working for the seller regardless of who the listing agent is. You have to explicitly ask for a buyer's agent for things to work differently and you probably have to pay that buyer's agent a fee yourself that is completely independent of the sales commission. Most people have no idea about the buyer's agent option. And if you know how the game works, you don't need that option anyway.

You have to remember that the normal agent showing you houses is not just a salesperson trying to get a bigger commission, that agent is obligated to pass any information on to the seller to might give the seller an advantage over the buyer. This obligation is either part of the Realtor code of "ethics", standard contracts or some nonsense. So you really have to be careful what you say around the agent. If you say, I'll offer $250K, but I'd go to $275K if I have to. You know what, the agent that is showing you the house is obligated to pass that bit about the $275K on to the seller, so that the seller can use that information when countering. It is not a two-way street, if the agent knows the seller is willing to take $240K, they will never pass that information onto the buyer.

It's kind of an interesting game, you need to get information from the agent, like comparable properties, but don't ask the agent for advice and never tell the agent what you are thinking. And when you get the comps, ask why they are for houses miles away and tell the agent to get more comps and include houses on the same street as the one you are trying to buy. The less you say to the agent, the better off you are. And when it comes to making an offer, the agent will probably tell you it is standard to leave the offer outstanding for some length of time. Ignore that advice, have the offer expire after 2 days at the most.

Oh, and be sure whoever else is with you (spouse, friend, relative) understands the rules and what not to talk to the agent about.

[Anthony]

Originally Posted by REAL 1

If you can come up with a better system we're all ears.
.

Oh, how I would love to come up with a system.

Actually, an arbitration like system, loser pays all, and everybody being held accountable for their actions (even the arbitrators), nobody being able to hide behind LLC's and such.

It would be a better, cheaper, and more fair system than we have now.