DEAR BOB: Two months ago, I bought a house through a “buyer’s agent.” Her contract says she represents me. However, when negotiating the price and the terms regarding defects found by my professional home inspector, it became very apparent “my agent” was really working for the seller. She did not present the inspection report or my revised offer to the sellers. I did not find out until it was too late to walk away. It cost me several thousand extra dollars. As a “buyer’s agent” she was paid a share of the listing agent’s sales commission so there was a conflict of interest. What could I have done to protect myself? – Johanna S.

DEAR JOHANNA: Presuming you had a written contract with your “buyer’s agent,” it probably specified the agent can be compensated by receiving part of the sales commission the seller paid to the listing agent.

Purchase Bob Bruss reports online.

This is customary. Who pays the buyer agent’s commission is irrelevant for determining real estate agency loyalty.

I am shocked your buyer’s agent didn’t present your revised purchase offer to the sellers, based on the findings in your professional home inspector’s report. It is normal, when an inspection report discovers significant home defects that the seller didn’t previously disclose to the buyer, that there is renegotiation of the sales price.

Presuming your purchase offer contained a contingency clause making your offer contingent on a satisfactory professional inspection, you then had the legal right to insist the seller pay for correcting defects discovered by your inspector or you could cancel the purchase and have your good faith deposit refunded.

Apparently, you elected to continue with the purchase although the seller wouldn’t give you any sales price or repair compensation.

You should have made certain your buyer’s agent properly represented you. If she didn’t present your revised purchase offer, based on your inspector’s report, you should report your buyer’s agent to the state real estate commission for breach of fiduciary duty and possible license revocation.

QUIT CLAIM DEED RELIEVES MOM OF RESPONSIBILITY

DEAR BOB: I have owned a vacant lot for many years. My son wants to build a house on it. He will obtain his own construction loan. Knowing from past experiences his record of defaulting on loans and even bankruptcy, I want absolutely no legal involvement with any of his future problems. If I give him permission to build on my lot, will I have any legal responsibility for his financial problems? – Betty H.

DEAR BETTY: If you continue to hold title to the lot, your signature will be required on your son’s construction loan and, later, on his permanent home mortgage. That means you will be a co-borrower, liable for your son’s possible default.

The only way to relieve yourself of possible liability for your son’s default is to sign a quit claim deed to him so he holds title to the lot in his name alone.

Presuming you have substantial equity in that lot, and don’t want to make him a gift of your equity, you might agree to carry back a second mortgage. For more details, please consult a local real estate attorney.

HOW CAN INSURER RAISE RATES FOR JUST TWO CLAIMS?

DEAR BOB: I have been insured with the same homeowner’s insurer for 22 years. About two years ago, I filed a claim for around $2,400 in theft loss when tools were stolen from my garage. The insurer paid with no hassle. Last January I had a $14,000 storm damage claim, which was again paid with no hassle. However, when I recently received my renewal bill, my annual premium was increased by more than $800. I called the state insurance commission office and was told this is perfectly legal. How can my insurer raise my rate so much for just two claims? – Kevin R.

DEAR KEVIN: You should be thankful your insurer didn’t send you a “non-renewal notice” because you had two claims within the last two years.

Many homeowners’ insurers have become very militant about refusing to renew policies for insureds who file too many claims. We agree this is very unfair. Unfortunately, in most states this unfair tactic is legal.

The new Robert Bruss special report, “Pros and Cons of Foreclosure and Distress Property Purchases,” is now available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet download at www.bobbruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

***

What’s your opinion? Send your Letter to the Editor to newsroom@inman.com.

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