Listing agent/Seller provided wrong information on MLS listing.

8 Replies

We signed a contract for property in Dallas area with $600 as option fee. During appraisal we found out that the Multi-family property was only 4500 sq. ft instead of 5500 sq. ft mentioned in MLS Listing. Obviously bank appraised the property 100k below what we had initially offered. Listing agent/seller refused to reduce the price much and we lost the option period money plus the fee for multiple inspections. Listing agent was also related to the seller. Can they be held accountable for the money/time we lost pursuing this for over a month? Had we known the property info. was so off we won't have signed the contract.

Are you asking if you should spend $2,000 in lawyers fees to recoup $600? That's not all that great an investment. 

This is part of investing out of state. The barbarians in Southern and Flyover states do things differently, and incorrectly. It can cost you money. 

Thanks for your response. Actually we spent over $2000 with the option fee, multiple inspections, appraisals etc. but we understand that it's part of investing. We have other rental properties in Dallas area and in the past we have walked away from other investment properties after spending $1-2K but it was never because the listing agent incorrectly presented some material facts. 

My question should have been "Can we take any action against the listing agent/sellers, legal or otherwise to penalise them for such a conduct?". 

And it seems even after becoming aware of the incorrect information, the agent hasn't yet updated MLS/other websites listing the property and is now going ahead with other offers. This is now going to burn another investor's time and money. Shouldn't realtors be governed a bit better to prevent this type of conduct??!

Most agents auto populate square footage from tax data in the MLS. They put a disclaimer that says seller to verify measurements. This seems to be an honest mistake. You could file a complaint but it won't go anywhere.

The standard phrase at the bottom of an MLS sheet :

"Information deemed reliable but not guaranteed"

Most agents will auto populated the taxing authorities square footage so more than likely their information is was incorrect. Unless you can prove that the agent intentionally inflated the number, it is just an honest mistake

Now that they know they will need to disclose to a new buyer. There are ways around disclosures though. 

When I find a "perfect" property, think lots of problems, I hand the inspection report to the seller before I say whats wrong. If we fail to reach an agreement the seller should be adding the report to their disclosure. I make sure to tell them so in a nice way of course. I know they don't always comply but the thought of having to disclose all their dirt keeps them negotiating with me. At least that's my reasoning. 

As you know investing is a blood sport. It stings but consider this the cost of education. Had you dumped 3K or 5K in a non refundable deposit you'd be out even further. I can only assume the numbers no longer made sense so you walked away. If so you did the right thing.

Originally posted by @Alberto Camacho :

Now that they know they will need to disclose to a new buyer. There are ways around disclosures though. 

When I find a "perfect" property, think lots of problems, I hand the inspection report to the seller before I say whats wrong. If we fail to reach an agreement the seller should be adding the report to their disclosure. I make sure to tell them so in a nice way of course. I know they don't always comply but the thought of having to disclose all their dirt keeps them negotiating with me. At least that's my reasoning. 

As you know investing is a blood sport. It stings but consider this the cost of education. Had you dumped 3K or 5K in a non refundable deposit you'd be out even further. I can only assume the numbers no longer made sense so you walked away. If so you did the right thing.

A good listing agent would not allow that report to be delivered to the seller.  The inspection was for the buyer and paid for by the buyer and may or may not be accurate

In regards to the square footage, if the listing agent is delivered a copy of the appraisal or was delivered the information by the appraiser, they have an obligation to disclose and change in the MLS that the square footage is XXXX and the source is Appraisal