NEW YORK (Money Magazine) - Mitchell and Debbie Roschelle met in 1997, married in 1999 and had twin boys in 2000. So what did they do in 2001? They house hunted, of course.
Although the Roschelles had a good idea of what they wanted -- four bedrooms on a couple of acres in Westchester County, N.Y. -- it took them five months to find it.
By the time they hit on a perfect contemporary in Armonk, N.Y., they'd seen dozens of houses and bid on a few, and the kids were starting to walk.
Desperation was setting in. So they made an offer, agreed on a price and proceeded toward contract.
They had just one hesitation: At $10,917 a year, the real estate taxes on the listing sheet for the $1.2 million home looked surprisingly low.
So between offer and contract, Mitch Roschelle says he asked his real estate agent, Nancy Zucker, to check, and she reported that the number was correct.
Things fall apart
Then things got messy. At the closing, the Roschelles learned that the taxes were nearly $5,000 a year higher. They could have walked and fought to get back their deposit, but their apartment had been sold, their belongings packed, and the prospect of another five-month search was too much to bear.
So they closed.
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Then they sued Zucker's Chappaqua, N.Y., firm for negligent misrepresentation. Mitch Roschelle says he wanted to be reimbursed $130,000, the amount he figured he'd spend in additional taxes if they stayed put until the kids finished high school.
When the case finally made it to trial on June 25, Stephen Penino, the attorney representing Zucker and her firm, argued that it wasn't Zucker's job to check the taxes (although she testified that she'd done so and told the Roschelles the number was right) because she worked for the seller, not the Roschelles.
Their lawyer countered that Zucker had done many things on the couple's behalf, from getting building plans from the town to giving contractors access to inspect the heating system. Penino responded that Zucker had acted to expedite a sale for her actual client, the seller.
"Purchasers have obligations they can't pass along to anyone -- not their agents, not their attorneys," Penino told me. And Westchester Supreme Court Judge Mark Dillon agreed. He ruled in favor of Zucker and her firm.
Says Roschelle: "He basically said to us, 'You're smart people. You've bought and sold real estate before. You know brokers work for sellers.'"
Roschelle acknowledges all that, but says it's tough to remember that the person sitting on your side of the table at closing is working for the enemy.
It doesn't have to be that way
He's right. When you call a real estate agency and say, "I need someone to help me find a house," the matter of who represents whom rarely comes up. But the reality is that in the majority of states, that agent represents the seller.
Unless, that is, you and the agent agree to something different. Getting your own representation often means no more than asking for it.
The National Association of Realtors' latest profile of home buyers reports that roughly 75 percent use an agent or broker; 43 percent have a written agreement that their broker is representing them; another 20 percent have an oral agreement.
Serving as a buyer's agent is the fastest-growing part of the realtor business.
So why doesn't every buyer go this route? Money. Traditionally, the seller's agent negotiates the commission, then splits the pot with the broker who brings the buyer to the table.
If your agent is working for you, the seller may refuse to ante up. Buyers now pay brokers only about 21 percent of the time, according to the NAR, but that number is on the rise.
Mitch Roschelle says he couldn't bear the idea of forking over 2 percent to 3 percent of a million-dollar transaction -- and he says he'd take the same position again (he would, however, check the taxes himself).
But if and when I relocate, I'll hire a broker who works just for me.