Marinites Elevated to Rank of "Poster Children"

Here is the latest on that spoiled, entitled Marin couple (ok, ex-Marin), who I've blogged before, Marty and Vernon Ummel, who agreed to pay a stupid price for a house in San Diego (hey, they came from Marin where people pay stupid prices all the time; it's part of their culture) back in 2005 and now that their house has lost value they are suing the realtor; jury selection has begun:

Tomorrow, Vernon and Marty Ummel, who purchased a $1.2 million home in Carlsbad three years ago, will try to convince a jury that their real estate agent defrauded them when he failed to inform them that similar houses on the same block were selling for more than $100,000 less than what the Ummels had paid.

Jury selection is expected to begin tomorrow morning in the Vista courtroom of Superior Court Judge Lisa Guy-Schall.

Although legal experts say the case is intriguing, most doubt it will spawn a raft of lawsuits in which disgruntled buyers go after real estate agents alleging they were led astray.

Experts also question whether the Ummels will be able to prevail, recognizing that ultimately, the Ummels were the ones who decided to pay what they did in 2005 for their two-story, 3,700-square-foot tract home in a neighborhood just north of the Four Seasons Aviara golf course. In those days, prices throughout the county were still climbing.

“The plaintiffs are not victims of a subprime loan scheme, nor are they victims of the declining real estate market,” attorneys for the Re/Max agent wrote in court papers supporting their request for a delay. “Plaintiffs simply think they paid too much for their home when they purchased it. Nevertheless, plaintiffs have now painted themselves as the 'poster children' of the current crisis.”

Well, I certainly do not expect the Ummels to win, and I hope they don't because they agreed to pay a stupid price for their house and they should not be exploiting the legal system to make up for their poor financial decision-making.

Be that as it may, I do hope something good comes out of this: I hope agents will practice greater disclosure; I hope buyer's interests will be better represented during the housing sale process and that the inherent conflicts of interest baked into the process of buying/selling a house will be eliminated; I hope...

As one commentor said:

the laws of agency and the concept of fiduciary duty are in direct conflict with the manner in which agents are compensated. Thus, this scheme is designed to be a losing proposition for the buyer. Always.

If only that one conflict of interest were to be eliminated, if agent compensation was not tied to the final selling price of a house, then we would be that much closer to a free and open market for housing. It would not take us all the way there of course (have to get rid of all the government sponsorship, tax breaks, etc.), but it would be a significant step in the right direction.