13 comments

  1. Pingback: A Cautionary Home-Buying Tale: Look Before You Leap | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area.
  2. david losh

    Holy Cow!
    Rats! I hate rats. That house on 145th cost me sixty thousand to repair.
    There’s no way an agent could miss rats.
    This is probably a very important web site. You were very brave to post it.
    I’ll just say that this agent could work for any company, and any company could do the same thing to a victim.

  3. david losh

    The renovation trap site is, and has been, a source of concern to me. I’ve been shown the site before. It kind of mimics a business model I’ve toyed with over the years.
    The renovation trap is an extreme case. It’s important that people read it. There are plenty of crooks lurking in the Real Estate business.
    Over at another blog site a guy took me to task for suggesting that the rat site was a good example of why it’s important to hire a full service Real Estate agent.
    Now with this last link I realize it is hard to know who to trust, the agent being on the board of the church and all.

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  5. Mark DeCoursey

    I’ll just say that this agent could work for any company, and any company could do the same thing to a victim.

    It is true the crooks, thieves, frauds, and liars could work for ANY company, and until they show their colors, the employers would not know.

    However, the true fiber of a company becomes known when the company learns that something has gone wrong. Does the company step in and fix it? Or does the company attack the customer?

    Windermere has given sworn testimony in our case that when they have a complaint, the complaint goes immediately to the lawyers. Windermere is defending the agent in court, and the agent is still selling real estate for Windermere.

    So far, Windermere’s lawyers have argued that the agent is not an agent of Windermere (he is a “private contractor”), that we had no right to rely on the agent, that if we were injured it was our own fault, that a clause in the purchase-and-sale agreement protects the agent from fraud claims, that he didn’t know he was the VP of the contracting company, that the certificate of incorporation is ”just a piece of paper,” that the connection is too remote to be a conflict of interest, that he was just ”helping” us with a referral, that Windermere brokers are not answerable to clients for the conduct of their agents, and that our damages were not caused by the agent lying to us and failing to disclose his conflicts of interest — our damages (if any) were caused by poor construction.  (That’s like arguing that the gunman didn’t kill the victim, the bullet did.)

    Windermere’s ”complaint department” has handled our case very much like the Windermere Watch case: Windermere has filed frivolous arguments, multiple motions, resisted discovery, and generally fought like Russia defending against Napoleon. The logic seems to be that eventually we will run out of money, and they will escape without dealing with the problems of their business practices.

  6. Leavenworth real estate - Geordie Romer

    David Losh Says:

    “I’ll just say that this agent could work for any company, and any company could do the same thing to a victim.”

    I agree. These stories are likely to come up against the Windermere’s, John L. Scotts and Coldwell Bankers because that is who is doing most of the real estate business in the area.

    Does anyone have any stories of these big companies coming to the table to help out former clients?

    Anecdotally, I know of a few local companies who have settled with deep pocketed litigators with weak cases. The pendulum does swing both ways.

  7. david losh

    My first high school job was working for a Real Estate company’s property management department. Since 1968 I have worked for, or at the direction of Real Estate agents in the Seattle area. Even though I have a Real Estate license I still own a company that prepares properties for sale.
    My license has been bounced around between several Real Estate companies over the years. Windermere is my favorite. Coldwell Banker was horrified that I had a “side contracting business.”
    Big Real Estate companies have deep pockets. Most attorneys advise clients to go after the Real Estate company whenever possible. The agent or contractor becomes a witness.
    Over the course of years there have been many law suits directed at Real Estate companies. Large companies seem to get more than smaller ones.
    The main point is that when people contract for having work done communication is important. While a project is going on any reasonable person should be able to keep track of what’s happening in their home.
    I have fired contractors or refused to pay. Very few times have I gone to court. Many times I have halted work to have some one else finish.
    Suing the Real Estate agent makes sense, or the contractor, or going to the State to file a complaint. Where is the Real Estate companies liability in all this? An employee is much different from an agent. Your attorney must have explained that to you.
    A smaller point is that Windermere’s in house attorneys defend Windermere. Demco protects Windermere, the company’s interests. How does that benefit the agent? It leads me to believe you are suing Windermere rather than the agent or contractor.

  8. Marlow Harris

    Remember, with both of these websites and with their lawsuits, we’re hearing only the Plaintiff’s story. Incidences could have been mis-remembered, damages exagerated, losses blown out of proportion to extort monies from deep-pocketed corporations.

  9. david losh

    I had hoped for a response here. The rat guy I can understand. In my opinion any agent should be aware of rats, it goes with the territory.
    The contracting story is very near to my heart. It directly relates to my over all business model.
    As this person circulates around the internet the company, or agent, should not respond. This is like trawling for evidence to use in court. Anything a company or agent says, in writing, can be taken out of context and presented in court.
    In my opinion that is how this person has gotten as far as they have.

  10. Mark H. DeCoursey

    Suing the Real Estate agent makes sense, or the contractor, or going to the State to file a complaint. Where is the Real Estate companies liability in all this?

    I am sorry I did not make the situation clear. First I should explain that the contractor was an essential element in our purchase of the house. Without the contractor’s “opinion” that the house could be renovated for the price stated, we would not have bought the house. And without the agent’s “opinion” that the contractor could do the job for the price stated within the time and with the quality we desired, we would not have bought the house and hired the contractor.

    The agent becomes liable because he did not reveal his intimate conflicts of interest with this contractor. First, he recommended this contractor and only this contractor to his clients. And he had persuaded at least 30 other clients to use this contractor over the years. He had not revealed his conflicts of interest to any of them.

    It was a very tight partnership – the contractor had no other source of business, and the agent recommended no other contractors.

    So what were the conflicts of interest? The agent was in business with the contractor developing a piece of land they hoped to sell for a shopping mall. The agent had taken out a personal loan for $150,000 to develop the land, and he was having trouble making payments by himself. The more money the contractor made, the more money was available for paying off the loan. We have documents showing that at least one payment was made by the contracting company, and other checks from the company to the agent.

    On another front, the agent was one of the original incorporators of the contracting company, the vice president of the company, and 20% shareholder. Without revealing these ties, the agent told us he had seen this contractor’s work over the years on many jobs, and the contractor’s work was “the best” he’d seen, best pricing plan, superb finish work, etc.

    Why didn’t we get references on the contractor? We thought we already had the best reference – the agent who said he had seen “many” of the company’s jobs, and they were “superb”. The agent was a pillar of the Redmond community – on the board of directors of the Redmond United Methodist church, referred to us by another member of the board of directors of the same church.

    Perfect hindsight might tell you we should have jumped right instead of left, or left instead of right, but the law states we have a right to rely on the word of the real estate agent in matters material to the sale. Though we are fairly sophisticated people, we did not design or intend this disaster for ourselves. We fell into it with good intentions and reasonable care – as did so many other of his clients, including a Bellevue construction attorney.

    The liability of corporations and brokers and real estate agents is well-defined in Washington law. The agent has a fiduciary relationship to the client, and a failure to disclose information the agent should have disclosed may be found to be fraud. In unofficial comments during the hearings, the judge has agreed on this principle.

    The legal agent of the client is the broker, and the legal agent of the broker is the real estate agent. When an employee is performing the duties of his employment, the employer is vicariously liable for the activities of the employee. The status of many real estate agents is “independent contractor” for the purposes of payroll tax, but that designation does not affect their liability status. The broker is responsible under law for the ethical activities of the agent, and that legal responsibility cannot be nullified by contract. If fired by the broker, the agent loses his license and cannot act as a real estate agent until he finds another broker to sponsor the license. The “independence” is not recognized in real estate law. When the agent commits a tort, the broker is vicariously responsible through his position as supervisor, and the broker is required by statute to supervise the agent’s activities.

    There are a dozen ways in which the agency is liable for the agent’s actions. The broker operates as a salaried employee of the real estate agency, and when the broker is liable, the agency is liable.

    The fact that the agent uses the Windermere logo, advertises to the public that he is a Windermere agent, appears on the Windermere web page, etc., encourages the client to consider the agent is authorized by Windermere to do what he does (see apparent agency). When that activity injures the client, the Windermere corporation is liable. And that is true whether the agent is salaried, on commission, or volunteer. The law is indifferent to his payroll arrangement.

    The agency advertises the agent and helps him to acquire clients. When the sale is finished, the agency participates in the commission, profiting by whichever artifice the agent earned the commission. The agency is a full partner in the agent’s activities, and cannot later step away and pretend not to be sullied by the agent’s activities.

    The contracting story is very near to my heart. It directly relates to my over all business model.

    In my opinion, your intended business model should not hurt you or your clients as long as you make full disclosure of your conflicts of interest to each and every client as required by law RCW 18.86.050. Our agent’s activities were tantamount to fraud because, as he has testified, he hid his conflicts of interest and told us he had nothing to gain from the contractor, when the truth was quite the opposite.

    Anything a company or agent says, in writing, can be taken out of context and presented in court.

    If that were done, the perfect defense is to provide the context on cross-examination. In court testimony, as in real estate, deceptive practice is not the best policy long term. :-)

    Incidences could have been mis-remembered, damages [exaggerated], losses blown out of proportion to extort monies from deep-pocketed corporations.

    Any company or individual has recourse to the courts to correct maliciously false statements. Because of their larger pre-tax legal budgets, corporations are much less vulnerable to libel and slander than individuals. As told on the Windermere Watch web page, Windermere sued Kruger for “libel of trade,” and the case was dismissed. Apparently, the judge did not think Windermere had been victimized by false statements.

  11. Marlow Harris

    Mark, I’m sorry about all your troubles. It really does sound like you’ve been victimized here by blindly trusting others to watch out for your best interests. I can’t remember how many times I’ve trusted people and it’s turned out ok. I never used to check contractors business licenses or surety bond and I was very lucky to have had quality work done. But it didn’t have to turn out that way. Your story is a sad one and a testament to make sure to check out everyone’s credentials before hiring.

    Good luck.

  12. John

    Hey, I know how you feel because a friend of mine went through something similar recently. All the best!