Court costs bluffed an aging investor from suing an agent who represented both the buyer and himself in a property transaction in which the buyer later sued him for $50,000 on a water claim. What he didn't know when he agreed to dual agency was that the buyer had a history of suing sellers for water claims.

"Dick," who lives in Seattle, Washington, was the landlord of only one rental property he operated from 1981 until 2001 when he sold the property for $315,000 to a buyer that an agent brought to him. The property wasn't listed at the time the agent came to him with an offer from a buyer. The agent disclosed dual agency to him, but she left a few things out, he says.

"The agent disclosed that she would represent both of us, i.e., dual agency," says Dick. "I knew nothing about agency, period, in real estate, until I did some research on the Web. Every source that I read said that it is the worst position that a buyer or a seller can ever put themselves into regarding real estate. All I got was the privilege of paying a $15,000 commission for nothing but having a person walk me through a bunch of "boiler plate documents" to sell my property. Although I was told what to expect in dual agency, I was not told what not to expect."

When Dick sold the property, he says he did not get the "fair, reasonable care and skill" that he was entitled to when he signed the dual agency disclosure document.

"The buyer and the agent's boss have had a very close social and working relationship with each other over the past 10 years," says Dick. "In fact, the boss had approached me a year earlier (2000) to introduce me to the same buyer. He offered me $330,000 at that time - then as the deal was coming to a close he backed out at the last minute. The boss of the agency, his friend, told me that he had bought another house."

"I was a fool to even entertain his offer again," laments Dick, "however at 67, I wanted to get out of the rental business so I accepted his offer at this time for $315,000. It was one of the worst situations that I ever let myself get into thinking that everyone was ethical."

Dick didn't know that the buyer was a former licensed real estate salesperson and broker and had recently received his law degree.

What spoiled the transaction was an after-closing finding of a water problem by the buyer, who had done his own inspection previous to closing, says Dick. Worse, it seems that the buyer had experience with finding water problems. He had won $14,000 from the seller's insurance company for exactly the same problem that he sued Dick over.

"The plumbing problem he sued me for could have been repaired for $4,000 according to a professional construction conflict-resolution company that I paid over $1000 to analyze the problem. The buyer, along with the same lawyer who got him $14,000 in a similar suit four years ago, got over $47,000 from me this time," laments Dick.

"Why didn't I fight the suit?" he says, "I paid over $8,000 to get where I got before mediation. I could see that the real winners in this situation were going to be the lawyers."

First, it would be difficult to prove that the agent knew the buyer was a serial litigator. And with dual agency legal in Washington, it would be equally difficult to prove that the agent didn't live up to her duties by suggesting ways that Dick could have better protected himself from such a buyer.

"At first I wanted to sue," says Dick, "until my lawyer discouraged me by stating that I wouldn't get as much out of it as it would cost me for litigation which at $260 per hour for a lawyer isn't cheap. My lawyer said that he could litigate my case for $25,000 more. Any basis for a lawsuit would be deception by failing to explain the law of dual agency in it's entirety, failing to maintain impartiality between the buyer and the seller under dual agency." P>"Legally, she stretched the law to the limit," he says. "She doubled her commission (both sides) and got rid of half of the responsibility of either a buyer's or seller's agent."

Still, Dick believes he has some recourse.

"She, the agent, and the buyer knew everything there was to know about dual agency and used it 'legally', I might add, to their advantage," he says. "This is the biggest scam that a so-called profession can ever use to their advantage, that of being able to dilute their responsibility to their clients with no accountability except for the dual agency position mandated by their lobbied efforts in their legislatures to reduce their accountability."

"I intend to bring this to the attention of the Washington State Real Estate Commission," vows Dick. "The basis for my complaint will be collusion on the part of the buyer and the agent to take advantage of a seller who had minimal knowledge about agency positions in real estate and minimal experience in negotiation techniques. I didn't know how to play the game as well as they did, especially when they could use the vagaries of dual agency to enhance their positions legally."

Dick doesn't intend to quit with a complaint.

"I would like to see dual agency eliminated, so other old fools like myself won't be duped into an experience like mine," he says. "I am researching this to see how many other states got rid of dual agency or won't allow it, and then go to my state representative using my experience and others, if they are out there, along with the information about other states who don't allow it and work to get it eliminated from Washington State."

"I'm retired and have a lot of time."

Published: August 29, 2003

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.