Wednesday, March 22, 2006

Weichert Realtors Consumer Fraud Lawsuit Reinstated

From the Star Ledger (NJ.com)

Court agrees: Location, location, location

A real estate agent who misrepresents the section of town where a house is located can be sued for consumer fraud, a state appeals court ruled today.

The unanimous ruling by the three-judge court reinstates a lawsuit against Weichert Realtors by a couple who thought they were buying a house in the “more prestigious” Montville section of Montville Township, Morris County.

In fact, the house was located in the township’s Towaco section, according to the ruling. It added that the buyers, Theodore and Francis Vagias, discovered that when “they were unable to send their son to the highly rated elementary school in Montville.”

According to the ruling, Montville Township has “three distinct sections: Montville, Towaco and Pine Brook.”

A lower court had dismissed the lawsuit, noting the real estate agent had correctly informed the couple the house was in Montville and simply forgot to add the word “Township.” That judge added that implying the house was located in a more prestigious section of town was mere “puffery” rather than consumer fraud.

The appeals court disagreed. It said that “for most people, the purchase of a house will be the most important investment of a lifetime.”

In reinstating the lawsuit, Appellate Division Judge Susan L. Reisner began by quoting the real estate profession’s well-known mantra: “Location, location, location.”


“It is not unusual in this state for buyers to pay astonomical prices for houses in areas considered to have particular cachet,” Reisner wrote. “Given the importance of location in the purchasing decision, buyers are entitled to expect that the Realtors who are assisting them in their housing search will know where the houses are actually located.”

56 Comments:

Anonymous Anonymous said...

I caught Burgdorff doing the same thing with this home (MLS 2244112):

http://www.realtor.com/Prop/1055565397

They first listed this $650K house as "Short Hills - 07078" (where it's squarely located/not near a border).

Then, after 2 weeks of no action listed as "Short Hills - 07078" they re-listed it as "Millburn - 07041" apparently to try and have the listing show up for people looking in the 'cheaper' town of Millburn.

Two weeks later, they moved it back to 07078...
Shady stuff...

3/22/2006 03:34:00 PM  
Anonymous Anonymous said...

I too see false info. For home locations all the time. Fortunately, I know the area, while buyers unfamiliar with the towns may believe they are buying what is advertised incorrectly. Look up Realtor MLS for Lavallette, over half the towns advertised for sale there are in Dover, Normandy or Ortley Beach (different school/town/taxes) – there in no North Lavallette! MLS claims homes in Point Pleasant Boro are in Pt. Beach or close to Bay Head beaches - again, completely different schools, taxes, districts.

3/22/2006 03:51:00 PM  
Anonymous Anonymous said...

Also I see things listed with the wrong school district, I know it is based on the fact that some schools in this town have a better reputation.

KL

3/22/2006 03:55:00 PM  
Anonymous Anonymous said...

Many listings for "Princeton" are really not Princeton.

Though this is more a SNAFU of the town/post office than the sales-droids, the droids don't hesitate to exploit this oddity.

A significant percentage (15-20%) of homes listed as "Princeton" are actually located in West Windsor.

3/22/2006 04:38:00 PM  
Blogger lisoosh said...

ANON -
Actually, houses listed Princeton are from several different towns - Plainsboro, South Brunswick and Franklin as well as West Windsor.

3/22/2006 04:59:00 PM  
Blogger lisoosh said...

I know someone this happened to - moved to Hamilton and only afterwards learned that because of a quirk their kids are actually to go to Trenton school district.

Big Ooops.

3/22/2006 05:00:00 PM  
Anonymous Anonymous said...

I agree that realtors try to do this all the time and it is indeed shady. But I don't know how anyone could let this happen to them. Before we purchased a home in Morris County, we went to see the school the kids would be attending and sat down and spoke with the principal, before we considered putting a deposit on a home. Isn't this pretty much standard procedure?

DLD

3/22/2006 05:24:00 PM  
Blogger grim said...

6 more Millburn houses on the market today, 4 over a million, 1 just under.

3/22/2006 06:12:00 PM  
Blogger Brian_10x said...

Pretty shady stuff. Isn't there a way to punish or prevent this kind of abuse?
Atlantic City Real Estate

3/22/2006 06:14:00 PM  
Anonymous Politely said...

Don't know all the facts, but knowingly misrepresenting location/school district/town seems like fraud to me. And if it's not outright fraud, it's got be gross negligence - after all, that's what realtors do as a profession - the least they can do is get the location right.

Although it's a great idea, not everyone does interviews with the principal before moving in (especially if you don't have kids). I think you should be able to believe the realtor when it comes to location. Interestingly enough, they say the same and use this code of integrity to promote their profession, which in my mind makes this even more egregious. See below.

From the 2006 Code of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS ®:
(from the Preamble):
The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal.

(from Article 1):
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly.

http://www.realtor.org/mempolweb.nsf/pages/code

3/22/2006 07:47:00 PM  
Blogger Grim Ghost said...

Sorry. but I don't have much sympathy for the buyers. Before making such a huge purchase, always check these matters. Especially in school systems with divided school districts.

I don't see hwo the realtor could be found guilty of fraud. All (s)he has to do is to say that she was mistaken.

3/22/2006 07:50:00 PM  
Blogger skep-tic said...

fraud requires intent to mislead. it's difficult to prove.

the way to solve this problem is to have the sellers warrant that the house is in XXX school district in the contract of sale. really anything that is important to you should be spelled out in the contract. that way you don't have to bother with suing intermediaries

3/22/2006 08:00:00 PM  
Anonymous Anonymous said...

This doesn't have to do with todays topic, but I figured I would give anyone looking in Mendham a tip.
This house has been reduced to $749,000 and is having an open house this weekend. It appears to be in a good location. I looked up the stats, and this house was purchased in 9/06 for $756,000. These people are absolutely desperate. I think a low ball bid is definitely called for in this case. Good Luck to anyone who is interested. Please keep us all updated!
MLS ID#: 2242102

3/22/2006 08:03:00 PM  
Blogger Grim Ghost said...

I think the school is just behind that Mendham house.

3/22/2006 08:13:00 PM  
Anonymous Anonymous said...

Recently my wife and I were looking at a house with a realtor in Montclair. She told us that the house we were looking at in Montclair was a very upscale neighborhood with good schools and a good range of diversity. We are white and its important to us to have schools that reflect society. After the viewing we left and had lunch. Just on a lark, my wife said lets drive by the elementary school. We went there and were shocked to see a scene out of Newark or Irvington or East Orange. No white kids! I am not prejudice but I also dont want to have my daughter be the only white child in the whole school. Diversity is great but it needs to be balanced. We then went to the house again to see "who" was coming home. Sure enough, we did not see a white face on the block. THE REALTOR LIED BECAUSE SHE WAS DESPERATE TO MAKE THE SALE. We called her and told her what we had seen and tried to make us feel bad saying we "must be prejudiced. It shouldnt matter the color of your neighbor's skin." Needless to say we are looking for a new realtor.

3/22/2006 09:06:00 PM  
Blogger JMW977 said...

Montclair has a magnet school system, so the neighborhood doesn't necessarily dictate which school your child will attend.

3/22/2006 10:37:00 PM  
Blogger Richard said...

the magnet system is a farce. you rarely get into even your first or second choice. i have no idea why anyone would consider living in montclair. it's surrounded on all sides by 'undesirable' communities and the taxes and house prices are atrocious.

3/22/2006 10:47:00 PM  
Blogger grim said...

Anyone else have problems with leaving comments last night?

Not sure if it was just me, but I had to turn off word verification to be able to post..

jb

3/23/2006 06:12:00 AM  
Anonymous Anonymous said...

Yes a lowball bid is indeed in order.
Just take 25% discount off of $749k.

It's all business not personal.

3/23/2006 07:59:00 AM  
Anonymous Anonymous said...

I believe it is illegal for the realtor to answer such questions as you asked about racial breakdown at school (and she could lose her license).

3/23/2006 08:20:00 AM  
Anonymous Anonymous said...

Back to the original topic, can you have any sympathy for people who failed to do any due diligence before closing on a house? When I bought my condo a while back, there was plenty of time after going into contract but before closing to verify all the details were represented properly. I find it incredibly funny that people would not even attempt a basic level of research prior to closing.

3/23/2006 08:21:00 AM  
Blogger grim said...

If an broker or buyers agent can't be trusted to provide correct information and the buyer needs to do the legwork, what value does the agent or broker add to the transaction?

3/23/2006 08:24:00 AM  
Anonymous Anonymous said...

The broker represents the seller. In my past purchases, I tried to avoid dealing with the either broker or any of their references (i.e. lawyer, home inspector or this like) since none of them were aligned with my long term best interests.

It is surprising how many people hire their advocates in the closing process based on a recommendation from the agent who contractual loyalty is to the seller.

3/23/2006 08:56:00 AM  
Anonymous Anonymous said...

"Not sure if it was just me, but I had to turn off word verification to be able to post."

Thank you, that word verification is such a pain in the a**.

3/23/2006 10:52:00 AM  
Anonymous Anonymous said...

As to the Weichert suit, let's try to read between the lines a little bit. I don't want to be "uncharitable," but it sounds to me that after the buyers moved in, they may have discovered that the "ethnic mix" of the school their children were going to was
"not to their liking." Of course, a lawsuit can't be based on the fact that the purchasers are unhappy with a "diverse" school system.

So, the lawsuit has to be framed in a manner which does not make reference to what is probably the underlying issue.

I find it very difficult to discern what the purchasers' damages are. Are they going to have an appraiser come into court and say that the house they bought isn't worth what they paid for it?

Just askin'.

3/23/2006 12:09:00 PM  
Anonymous trroll said...

grim,

I agree we you as to the usefulness of the brokers/agents when we have such an abundance of resources to our disposal to search for the homes. But I agree with one of the anons that agent can't disclose racial diversity of the area or the school system in the town. They can't even tell you that there is a church or synagogue around the corner - or they can be accused of bias and improper conduct (er go - can loss the license). That does not mean that the can misrepresent the facts to their advantage neither - to later say - Oh! I was mistaken. I'm so sorry - or something in that tone.

3/23/2006 12:45:00 PM  
Anonymous Anonymous said...

If not Montclair, then what township would you recommend for good schools within Manhattan commuting distance?

3/23/2006 01:40:00 PM  
Blogger chicagofinance said...

Anonymous said...
If not Montclair, then what township would you recommend for good schools within Manhattan commuting distance?

1:40 PM


Westfield, Fair Haven/Rumson [downtown Manhattan], Colts Neck, Holmdel, Hoboken has some good options, but you will have to pay for private school above your property taxes

3/23/2006 01:51:00 PM  
Anonymous Anonymous said...

Colts Neck and Holmdel have good commutes into NYC? Is almost 2 hours each way considered a good commute these days?

For me, 60 minutes max is the commute boundary, and the house had better be a castle if it's entails a 60 minute commute.

3/23/2006 05:17:00 PM  
Anonymous Anonymous said...

>> If not Montclair, then what township would you recommend for good schools within Manhattan commuting distance? <<

Denville, NJ (on NJ transit train route)
Parsippany, NJ
Boonton, NJ (on NJ transit train route)
Montville, NJ (near Towaco's NJ transit traing route)

CNS

3/23/2006 10:14:00 PM  
Anonymous Anonymous said...

Why are there so many stupid people asking questions about NJ homes... why don't y'all put some miles on that Lexus, like 30k this year and drive around seeing each town. If you count on realtors you will get fucked. Ask some NJ natives in a local store or library. There is more to life than the shit commute to the New York Shitty. Montclair is one of the worst places to live... no middle class...just super rich and super poor. Hi taxes for a shitbox home, and lovely thug life hoods about 2 miles away. When you run with the pack, you start think like the pack, and when you think like the pack, you'll stink with the pack.

3/24/2006 01:18:00 AM  
Anonymous Anonymous said...

Boonton has some lovely sections but the school system is the second-worst in Morris County. Parsippany is decent but the schools are overcrowded. Denville is a good choice, but better yet is Mountain Lakes - their school is #1 in Morris County and they have some beautiful houses. You can commute to NYC via the bus, or you can drive to Jersey City and take the PATH.

RML

3/24/2006 12:39:00 PM  
Anonymous Anonymous said...

I believe that the people who are attempting to sue weichert are a bit off the mark. In the interest of full disclosure I must say that I live in Towaco, and I am a bit annoyed that their accusation that Towaco is the "wrong side of the tracks" is accepted as valid while the debate centers on who is responsible and what the penalty should be for the error. There is not a home in my imediate neighborhood (some 200 plus homes) that would sell under a million, and many are two times that or more. We share a middle and high school, and all of the grammar schools are highly regarded. I think the plaintiffs are foolish and/or motivated by other factors. p.s. My friends house in Pine Brook is possibly going up for sale, if those who look down on that section could come up with 2.5 million, they could slum it with the rest of us.

3/27/2006 07:49:00 PM  
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Anonymous Anonymous said...

I have just had a major problem, also, with Weichert and the sale of our home. They were unethical,and we lost $50,000.00 on the sale because of them.Can someone please post who the attorney is handling this case,as we are no longer in New Jersey.
Thank you

4/13/2006 07:46:00 AM  
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Anonymous Anonymous said...

Hint #3 for . Let The Sun Shine In: Open draperies and curtains and let the prospect see how cheerful your home can be. Dark rooms do not appeal. One trick which always seems to work is to replace 60-watt bulbs with 100-watt bulbs, and have your Realtor� turn them all on, even for a daytime showing (and off again after the showing).

6/26/2006 04:12:00 PM  
Anonymous Anonymous said...

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7/01/2006 04:28:00 PM  
Anonymous Anonymous said...

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7/02/2006 09:12:00 PM  
Blogger Maine Real Estate Fraud said...

Maine is becoming known for its fraud---especially when the NAR is involved...

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7/23/2006 03:51:00 PM  
Blogger Jake said...

I friend of mine just sent me this link, and I've linked to it from my own site.

I was so upset by the unethical behavior of Weichert Realtors Upper Montclair office that I escalated to their management, and was stonewalled there. I created a Web site, Why Weichert Sucks that details my case.

Keep up the good work, Grim!

8/07/2006 11:54:00 AM  

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