Tough times to be a Boston real estate agent (p. 1)

As you’ve read, there’s news that two local real estate agents have gotten themselves into a bit of trouble.

First was Joe DeAngelo over at Gibson Sotheby’s International Realty who has been accused of deliberately misleading one of his clients.

From the Boston Globe:

Alyssa Burrage says she was smoked out of her new $405,000 condominium.

Burrage, a 32-year-old advertising company employee with a history of asthma, had smelled cigarettes when she first visited the bright, parlor-level condo in Boston’s South End in 2006 with her real estate broker. But the broker, she alleges, assured her that the owner must be a smoker and the stench would disappear.

Yet, after she moved in, the smell continued; she subsequently discovered that the smoke came from one of the people who lived in the condo below.

Fast forward four years, and Burrage has sued the agent and/or the brokerage firm that employs him, the two men who live below her, and the building’s condo association.

… DeAngelo and his employer, Gibson Sotheby’s International Realty, deny that Burrage questioned him about smoke in the condo.

“DeAngelo never made any misrepresentations, or any representations at all, concerning the source of the alleged smoke smell,’’ the broker’s lawyer, Jay S. Gregory of Boston, said in the filing.

There are several things that aren’t clear from the article. First, has Burrage sued Joe or Gibson? Presumably, Gibson, the real estate agency, since ultimately the actions of its agents are its responsibility.

Second, it’s not clear exactly who showed the woman the property and under what guise. Joe was the woman’s buyer’s agent, from what we can gather from the article (and from what shows in MLSPIN) so he was responsible to her, yet the article makes it sound as if he was the one who showed the property on behalf of the seller. Another agent at Gibson is listed as the seller’s agent – did that agent show the unit to the buyer or did Joe let himself in, each time?

It’s a slippery slope when both buyer’s agent and seller’s agent work for the same company. It’s legal for this to happen, in Massachusetts. But, it does raise many ethical questions. The agents know each other, they converse with each other, they may inadvertently share information with each other. Meanwhile, the company, ultimately, is in the business of earning revenue; is it possible to show loyalty to both sides?

I don’t see this as a “second-hand smoker” case but a simple one of disclosure of material facts by the listing agent. Also, as her agent, Joe was required to work on her behalf. Whether he did is the central argument in this lawsuit.

However, it does raise the question: is it a material fact to disclose that someone smokes in a building? I would say, maybe. The point of this is that it was material to the buyer – she states she asked several times about the smoking situation. It doesn’t matter (necessarily) if it would be important to you or me; it was important to her.

My sister smokes and she lives in a seven-unit condo building. The guy upstairs listed his condo for sale. He came down before the first open house to ask her to stop smoking for several hours. She agreed. However, the next Sunday, he asked again, and she said, no.

Was it ethical for the owner to ask? (I believe he was doing a for-sale-by-owner, so there was no agent involved – there’s a lesson there, too, people.) Should my sister have complied? What would the buyer think? (I believe it didn’t end up selling.)

The rule in real estate is to “over” disclose. The fear of litigation is the threat – obviously, a real one.

Related posts:

1. Owner’s claim goes up in smoke; Boston real estate agent vindicated
2. Tough times to be a Boston real estate agent (p. 2)
3. Canada’s housing market didn’t collapse and your agent will work for food
4. Tip: How to buy and sell real estate from million-dollar agent (for free!)
5. Dorchester real estate market sees signs of resurgence