The legal risks of a home selling far below its market value
On Behalf of Porter Ramsay LLP | Feb, 23, 2022 | Real Estate Law
The real estate market continues to grow in British Columbia, with houses selling for higher rates than ever before. But what happens when a house sells for below market value? While in most cases this just means a buyer got a good deal, one Vancouver property owner took legal action against her real estate agent for a property she says sold below market value.
Background
The situation in question occurred in 2017 when a woman sold a house in Vancouver’s Dunbar area. The woman, who is now 94 years old, hired a realtor to sell the property, which was one of four she owned in the area. The property was first listed at just under 2.3 million, but sold for 1.5 million in the end. However, an appraisal following the sale indicated to the seller that the home was worth $1,925,000. The seller, who had agreed to the $1.5 million sale price on the advice of the real estate agent, sought legal action against the real estate professional to cover the $425,000 difference.
Evidence and claims
The case depended in large part on expert testimony from both sides. Correspondence and contracts were also considered. The seller claimed that the realtor failed to act in her best interest and did not take the necessary steps to ensure fair market value was secured for the property. She further claimed that the realtor did not effectively market the property in order to garner higher bids. Therefore, she claimed, the realtor had breached their duties.
Outcome
The case was heard by a British Columbia judge who determined that the realtor had not breached his duties of care. The judge noted that a lack of evidence on the part of the seller was part of his decision. Specifically, he noted no affidavit evidence or complaint at the time of sale regarding the price. Therefore, the claims against the realtor were dismissed.
Selling a home can be tricky business, and it is understandable that sellers want to get a fair price for their properties. This case shows the importance of both real estate agents and sellers doing their due diligence to ensure a fair sale. If legal issues should emerge during or following the sale of property, all parties involved should speak to a British Columbia lawyer for support and advice.