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I have been licensed since 1982 as a broker in two states, Illinois and Wisconsin. Illinois previously had the same statute....all realtors represented the seller. I had also personally moved 18 times in 25 years and could write a book on the realtors I encountered. Therefore, I was not ever going to perform that way. I went into the crawl spaces, walked the entire perimeter of the property and called out my personal professionals to ascertain a problem. Finally, the state rules and regs changed. You represented the party with whom you are working an buyer agency was in full force. Once you have a buyer agreement signed, the realtor represents that buyer, not the seller. The listing agreement takes care of that. I winced at what you experienced with obvious signs of mold, health and safety issues, obvious roof deterioration, etc., etc. Buyer agency is a good thing and should be utilized in every single state. If that is not the case, the due diligence on the part of the buyer...going to the courthouse, checking everything you possibly can....I even learned a railroad was proposed close to a property a buyer of mine was considering. Needless to say, it was difficult to learn for me, but meant a great deal to my client. If realtors didn't put themselves in the deal, their reputation would increase by leaps and bounds.
I'm not sure I understand this.... It's written in WY law that this exact thing CAN be done IF the seller's agent gains the 'informed consent' of the seller to do so. So, it is not at all illegal to do so in WY if done in the right way.
in my experience … and in that of numerous folk I've visited with in my background checks on properties throughout Wyoming … the agents here by common practice do not seek or utilize such an avenue to making a deal. So, by not pursuing this avenue, their relationship to the seller is governed by the guidelines of the primary fiduciary relationship.
Union Pass?
No.
If the agent was a local Dubois agent, then they would almost 100% certainly have material knowledge of that particular problem, and by WY law (regardless of their fiduciary relationship with the seller), would be required to reveal that info to the buyer. That is not one bit different in others states with which I am familiar, like VA or NC. What we don't know from your description of this situation is where that agent was from, and so can't judge if the agent would likely possess material knowledge of that water situation. If he/she did have that knowledge, and did not reveal it, then they broke WY law.
It was a local Dubois agent, and they likely did know that there was a water supply problem. While they were bound to disclose the water supply system per the developer's filing and the standard water quality test report, the inadequacy of the system to deliver functional water to the residents was not required to report. So they did not, and it was up to the buyer to perform their own due diligence regarding domestic water supply.
Personally, I've encountered this defect in water supply on numerous properties throughout Wyoming. Especially on old dryland ranching properties where a developer has subdivided a number of 40-acre "ranchettes" in the property. They've found it a sales advantage to promote that they supplied domestic use water rather than sell the property without water … as in, you'd have to drill your own domestic well. The location may be that on your 40 acres, you might not find water. Seen that more than a few times where parcels were sold and one did find water (perhaps after drilling a number of dry holes) … and the nearby parcels did not find water on their parcel. They had to haul in domestic water (which may have been due to no water or water quality issues).
We DID have a Dubois agent, with whom we worked as buyers, tell us about this water matter on the 1st day out looking at Dubois properties. So it does not seem reasonable (in my experience at least) to paint all WY realtors with the same brush.
Did the agent tell you about the local water supply issues in general, or did they disclose a supply problem about a specific property they showed you?
And yes, I'll concede that not every WY realtor episode is as flawed as I portray. For the most part, they're worse. But maybe there is an honest ethical real estate agent in this state, I just haven't found one.
I've related on these pages how I've been victimized by an agent with a significant violation in a completed deal and the managing broker (of the largest real estate agency in the area) when approached about the problems resulting had an attitude … "sue us, you wouldn't be the first". And the real estate commission investigator I attempted to file a complaint with was appalled and incensed that I let go a "damn" in my description of the situation, far more concerned about my use of an offensive word than the essence of the violation(s) done by the agent and the brokerage. The managing broker had no interest to making a reasonable effort to "make things right" for their client … and it would have been relatively simple for them to do so. That's what was staggering to me about the situation … they'd rather go to the fight instead of taking a far easier and elegant solution upon discovery of a problem they created and could easily resolve. In net effect, it was a few hundred dollar problem for them to resolve in-house, but they'd rather make a conflict over being caught not complying with ethical and legal requirements. What's crazy about the whole episode is that I didn't approach the problem as a lawsuit situation, I saw that the agency had a likely easy way to resolve the problem in-house and thought that upon notification they'd want to satisfy a client in a low-key manner that minimized the concerns and made things "right" for their client. But no, their approach was to be instantly offended and go into their "denial" mode … and charge headlong into a mode which was going to get costly for me to pursue even though they were clearly in the wrong and knew it. Ultimately, they did resolve the matter in-house for minimal expense out of pocket for the agent that messed up the deal and made good for me … but it took a year to do so.
I've looked at a couple hundred properties around this state in my residential and commercial property adventures over the last several decades, and every agent I've visited with so far has been functioning at the level of "found money" rather than professional competency.
But I won't say that water is not a potential problem anywhere in that region!
I've spent many pages on this forum documenting specific water situations I've encountered … or have seen with neighbors and friends throughout Wyoming. Wyoming water law and functional potable water availability is a huge issue in many areas of the state. Contamination by farming, ranching, industrial, or naturally occurring discharges are significant throughout. Lack of sub-surface water flows are extreme … in many other states, a trained eye can reasonably predict where water will be found with a well due to surface topography. Here in Wyoming, such may not be the case due to a whole different random formations where water pools or flows preclude access to water from wells.
And, I marvel at the way roads sometimes just meander back and forth across numerous properties... back east, this type of uncertainty in legal access would be a problem..... does not seem to be so out in the interior west. I still have not figured that out....
You've just expanded on the reason why "due diligence" is so critical to real estate purchases out here. Knowing where the easements are on parcels can be a significant issue for access or for property use.
I've personally owned an easement that newcomers from VA couldn't fathom that a private individual could own. The easement that bisected their land that functionally destroyed their quiet enjoyment, access and intended use of a substantial portion of their property. They "assumed" that they could block out my access/use of their land, fencing me out of an irrigation ditch to which they had no water right. But I needed that unrestricted access to maintain and operate the ditch without any interference by the property owner, which had been no problem since 1886. Comes now the new owner from VA who sees the ditch and figures he can closely fence it to maximize his use of his parcel and construct a bridge over the ditch which will make ditch maintenance and access impossible. Stubborn VA owner turned the episode into a six-figure lawsuit situation over several years in which he was on the wrong end of, legally and by established custom in Wyoming. He'd have saved himself a lot of distress and expense if he'd done his due diligence about what he was buying before signing a contract to buy. There's a reason why the parcel was priced so inexpensively … because the back 2/3's of the platted property was landlocked away from the residence area. The reason it was platted out at 40 acres total was to gain a well/septic permit, not because there was a big dryland pasture to graze his intended 25 head of cattle.
The key to understanding the significance of having that ditch operation/maintenance access is this: While the easement gives the senior rights to the use of the land, it comes with the responsibility that any damage to the adjacent property/structures is upon the ditch operator. In this case, the ditch was uphill to the residence site and located in an area where the tumbleweeds from the adjacent dryland wheat fields would accumulate on windy days. So the ditch could … and frequently did … clog up and was at risk of blowing out directly uphill from the house and outbuildings on the property. By denying the access to inspect and maintain the ditch, the new property owner was setting up a situation where a blow out … at a location where it had historically done so in the past … would likely flood his house. Wyoming law doesn't allow for an exemption to the ditch owner's responsibility for the damage caused due to interference from the property owner promoting the flood. When the ditch blew out at this location, there was 1 1/2 miles of ditch from the headgate that would empty out. So even if the blow-out was reported immediately, closing the headgate would still supply a minimum of an acre-foot (or more!) of water directly at the house below the ditch.
Yes, the choice of the house site was not prudent. Yes, the subdivision of the property … 40 acres on the corner of a 4-section dryland wheat field wasn't prudent. It was merely a convenient way to provide a residence site for a family member as a wedding gift many years ago, a small parcel upon which had historically never been productive and difficult to plow/combine due to being blocked off from the rest of the field area by the irrigation ditch. Unfortunately, the new owner from VA didn't understand what he was buying … it wasn't his "dream ranch", but merely a residential site with a productive domestic well and a septic system installed. At that, the fellow had big ideas about "40 acres!" of productivity based upon his world-class knowledge from VA of what he could produce and support on 40 acres there rather than what 40 acres could support in Wyoming dryland. His dream of a dozen horses and 25 head of cattle, llamas, alpacas and a vegetable garden simply isn't supported on such a small site in Wyoming. But he was going to show us ig'rant locals how it was done. NOT.
We just sold our house in casper it was horrible as a experience. Granted it is a buyers market but we had a realty company for the first 6 months that showed it a total of 6 times. We had to pack and move most of the household stuff into the garage about 50 feet from our house. Well we took on a second realty company for another 5 months. We again moved more of the house ending up with appliances a bed two recliners in a three bedroom 1850 square foot house and deleted the asking price 25,000.00. This year we had to keep the home "show ready" at all times with most appointments to see it with 45 minutes or less to get gone for the showing. We couldn't cook a lot of food we like so it wouldn't smell offensive. We had 20 or 30 minutes to clean, make bed, vacuum, dishes, pickup anything that would look bad and get out. Our realtor company didn't think our sale rated a licensed realtor I guess and gave us a realty assistant to represent us and he basically rolled over like a kicked dog when a buyer wanted anything like new work on/in house, lower price, things to stay with property we didn't intend to, etc. He was not aggressive working for us and we had to say no more than I think we needed. I do realize we needed to sell, wanted to but did not have to. I have sold 11 houses and 6 properties in my life in 7 states and never been dealt with like this. Casper was a great site in my rear view this time ha ha for the 4th time.
Lets look at the real life facts of the real estate business.
1: Real estate agents under the laws of agency, cannot lie to their buyers or sellers. If asked a question, they must tell the truth. This is the same in all states, and the Realtors Code Of Conduct.
A lot of them try to come up with an answer to questions in their mind, and may say things that are complete lies, but the agents lack knowledge on the subject to the point, they do not know they are telling lies.
2: 85% of all real estate is sold by 20% of Realtors.
3: 80% of all Realtors that enter the business, will fail out and leave the business as they cannot sell enough property to make a living, and some never even make one sale that closes.
4: To get a Real Estate License, they take a course to make it possible to pass the test, but are not required to know anything about real estate.
5: A few agencies have a training period to train agents, but most just show them a desk, hand them some contract forms and tell them to go to work. A few learn the business, but a large majority of them do not. They work under the theory of find how much the buyer can afford to to pay, and show them houses until they get so tired they buy something or get tired of that agent and move on to another. This is why, when poster above wanted to only see single family homes, was shown mostly 2 story. They don't listen to what you want, they believe to be tour guides and show you homes in your price range, till you find one you like, and want to buy it. And the majority of homes, are not suitable in any way.
I spent from 1972 until I finally retired as an investment real estate broker. I only sold 6 homes as single family residence to people who wanted a personal residence, and that was to help out friends who had been getting the run around.
I took University and private real estate courses, for one year to learn the business before I went into it. I had 18 years sales experience before going into real estate as high a position as for an old well known company division sales manager over western half of USA, so I knew I had to learn the business before going into it. I was taught, that you should thoroughly counsel with prospects before you show them a property. I learned if you could find 3 ideal properties to meet that clients needs, you would be showing them what they wanted. And if after those three, if they still wanted to see homes, it was better to drop them, as they were not serious buyers. My average in all the years in the business, was I showed 1.5 properties per sale. My first day in the business, I sold a 2 year old luxury smaller apartment house to a former co-worker. My 4th day in the business sold the identical one next door to another client. The next work week, I exchanged a 16 unit good solid middle class apartment house as a down payment on a good size irrigated farm. The farmer was acquiring the apartment house for his crippled daughter as a gift to her, so she could have a way to support herself and her 2 children (she was a widow injured when her husband was killed by a drunk driver). She owned it free and clear with no mortgage so she had a very good income. He had sold all 5 of his other farms, and was retiring.
I did sell homes to investors, and my best day was selling a 13 unit to be built subdivision of smaller homes in a nice area on the phone plus 1 home that was brought to me that morning that had to be sold within 24 hours to avoid foreclosure. All sold on the phone to my investor pool, with one buying 5 and no one taking less than 2. The prices the let me sell them for, made good rentals.
A lot of people have a problem finding an agent that knows what they are doing, and can properly handle the sales.
Lets look at the real life facts of the real estate business.
1: Real estate agents under the laws of agency, cannot lie to their buyers or sellers. If asked a question, they must tell the truth. This is the same in all states, and the Realtors Code Of Conduct.
A lot of them try to come up with an answer to questions in their mind, and may say things that are complete lies, but the agents lack knowledge on the subject to the point, they do not know they are telling lies.
(snip)
you, sir, have a marvelous ability with words to mask the reality of real estate agent actual practice here in Wyoming.
perhaps your rationalizations accurately reflect how the business is conducted in many other marketplaces.
But here in Wyoming, the effective practice of real estate sales frequently ignores the legal and ethical obligations you mention with flagrant abandonment in a manner which doesn't make for an actionable case after a party is damaged or deceived.
unfortunately, in the Wyoming marketplace, the real estate agents who successfully make a living here have generally figured out how to avoid responding to questions that might lead to a disclosure not strictly in conformity with their responsibility to not say anything derogatory to their seller's interests.
Hence, even when the stench from a mold infestation presents, the agent smiles and says that they don't notice anything.
Or when a roof is obviously leaking to the point that moisture is dripping down off a ceiling onto a carpeted floor so that the seller has placed plastic sheeting over the carpet to protect it and a bucket to capture the drip, the agent smiles and tells you that the roofer who's been working on the place said "he's done everything he can to fix the roof" and "it's OK". A very well crafted response, you see, as the agent is relaying condition information attributed to somebody else. Parsing this response takes the responsibility for the claim off the agent's shoulders. Considering we're watching the drip and the water level collected in the bucket, that's a pretty neat dodge, wouldn't you say?
In that same house, there was obvious electrical code issues. For example, in one bathtub/shower stall enclosure area above the tiled area, there was an older jelly jar type light fixture which had a convenience 2-prong electrical outlet. The type of fixture that might have found a location in years prior above a medicine chest/mirror over a sink, to be used for an electric razor or a hair dryer. An older non-grounded outlet, at that and not on a ground fault circuit breaker. But in the wet area of the shower stall? Mrs Sun noticed the fixture immediately while she was looking at the buckled drywall at the ceiling there and almost laughed … she elbowed me, pointing it out and suggested it was a prop from a Hitchcock movie scene "how to electrocute your guest in the shower or bathtub". I asked the agent if the house was OK electrically, code compliant. She rattled off some of the latest mods to the house about the new wiring for the clothes washer/dryer and how an electrician had said "all was OK". Again, a pure denial of obvious defects and placing the responsibility upon somebody else's shoulders.
Similarly, when a "world's smartest farmer" from VA comes to Wyoming and sees an obvious irrigation ditch across their dryland property, the real estate agent tells them that "they turn the water on in the spring". You bet, they (as in the ditch operator) do so to the extent that they can. But the response avoids the question: "how much water can I get from this source to irrigate the land down here that I want to make into my horse pasture?" A not very obvious concern to the ignorant buyer prospect because they have no knowledge of Wyoming's water laws, scarce availability of water, and how water rights are adjudicated. The bottom line is that when the buyer said "we'll grow enough grass here with the irrigation to be able to keep 6 horses in this pasture", the real estate agent simply "nodded their head in acknowledgement of the statement" without any comment that the buyer should investigate how much water they might expect to receive. And that was in light of the real estate agent knowing that there was no water right held by that parcel, none, nada, zip, not one f'ing drop of water could be used on that property. Crafty, no?
I'd mention that our own ranch purchase was done under the same false representations by the agent. Our parcel was being subdivided off a 6-section ranch. The property was "flagged" by the seller to represent what was being sold, with an assertion that Xnumber of acres was the parcel. We bought it, wrote the contract, and submitted our earnest money for an all cash deal on the place. At the closing, after the paperwork was signed and we'd submitted our cashier's check, the seller's agent casually mentioned "oh, by the way, the property was sold on the basis of Xnumber of acres. When we had the surveyor out to do the property lines for the legal description and measure the property, the flags enclosed more acres than we sold you. So they moved the flags to the property lines that had the correct acreage". The survey was done 5 weeks before the closing and the moved flags represented more than a trivial alteration to the property we thought we purchased. There was certainly adequate time to notify us that the property perimeter had been materially changed from what we'd been shown and represented as buying.
We subsequently went to inspect the property after the closing, which was held 65 miles away from the land. The property lines along the south perimeter of the parcel eliminated an access road and pasture that adjoined two irrigated fields. That meant the loss of access to those fields and adjacent pasture without creating a new access road through the irrigated land. We lost about 8 acres on that side of the property. Also, another field that had been the entire rectangle of a pasture had new pins and flags showing a diagonal property line through the pasture instead of along the old fence line. This meant that we had to fence a 1/2 mile across the field to keep the seller's cows out of our pasture. Despite Wyoming statute requiring that both parties pay for the fence, our seller never contributed a penny for the fence while he still ran his cattle on the old ranch. He knew full well it would cost us as much in legal fees as we'd be able to recover from him if we got a judgement, so it was a futile effort to collect from him.
Anyway, I later went to the RE commission and asked if the misrepresentation of the parcel when we saw it and what we legally purchased was grounds for the property to be restored and recorded in accordance with what we were shown to be buying. Nope. It was disclosed to us that the seller had personally placed the flags and "estimated" the acreage. What governed was the contract specified acreage, and that's what the seller delivered. Never mind that there were features of the property as represented that were significant factors in our "buy" decision.
Same thing for the new fence required along the south side of the irrigated land. When he platted out and sold some 40's on nearby portion of the ranch, they didn't mention that the new owners would need to "fence out" the cattle … and the seller never paid a penny for any of those parcel fences, either. Of course, the agent never mentioned to the buyers that Wyoming is a "fence out" state and that the seller would be continuing to run cattle on the old ranch.
Your assertion that the real estate agent is bound to answer questions truthfully is a sham as customarily practiced here in Wyoming. As I've pointed out in this and so many other threads, they are highly skilled and practiced in the arts of non-commitment and evasion that sound like a response but are effectively non-responsive with full knowledge of the deception on the seller's behalf. Or at least non-responsive to the extent of being actionable at a later time.
Worse still, little of these verbal or body language exchanges are documented in writing so it always comes down to "he said, she said" after the fact problems. Not gonna' hold up in court if a buyer has been materially damaged or falsely induced to make a purchase.
PS: just for reference, I, too, held a RE license in Colorado many years ago. With a then wife and MIL in the biz, I found it convenient to hold my own license for my real estate investing. I sold a number of houses as a part-time agent, but I didn't have the time to pursue this with my other active businesses. Nevertheless, my broker required us to have weekly sales training meetings (in conjunction with the weekly "walk through" of the current listings in the agency), and monthly sales training. I had to attend (and pay for) more Zig Ziglar and similar sales motivation/training courses than I'd care to admit. For the most part, the competing real estate agencies in the area had the same requirements. My MIL had to attend such classes each month as a condition of her employment at what was then the leading residential real estate agency in the area. This, of course, was back in the day when agents split commissions with their broker agency and in the early days of such desk outfits as REMAX where the agents paid a fee and retained their earned commissions. What I learned about selling and the sales process from these classes is quite at a variance from what I've seen in the real estate sales biz in Wyoming for decades now. I wouldn't be able to survive as a RE agent here today because I don't have the ability to deceive as the agents here now do.
4) Here's the biggie: the moisture problem throughout the house has lead to a house full of black mold. You can see it on numerous surfaces throughout the house, but the smell is present everywhere. The mold has apparently blossomed in all the walls, likely in the carpet/subflooring, far beyond what a superficial cleaning could remove. This is a serous health defect, a very "toxic" house. IMO, the problem is so serious that the house is a "tear down".
The real estate broker we're dealing with is a "top producer". She's very professional in presenting a property and representing the seller in accordance with her fiduciary responsibility. She will not say or suggest anything that is against the seller's interest by law.
… and the real estate broker is smiling and telling us the reasons why the seller is justified in asking a premium over-market price due to the location.
I'm in Indiana but might eventually move to another state. Your message is a reminder that no all states work the same when it comes to real estate. I've got some questions though:
#1: Can a buyer only use a seller's agent in Wyoming? Here in Indiana, a buyer should have their own agent. The agents split the commission among themselves. Discounted brokers and such usually have to come to an agreement on how the discounted commission is to be split. I guess if one doesn't want to waste time of another agent, using the seller's agent makes sense.
#2: My sales agent is a top producer, yet he can't ethically lie. There were all sorts of protections that all agents have to adhere to (so it works both ways as agents are both selling and buying agents through their career). I had to admit to a surface mold issue which we disclosed. When we had an inspection and there was mold in the crawl space and attic, we had to disclose that as well. Sale still went through though.
#3: How can such real estate agents and property owners not be sued and/or criminally charged with fraud. Misrepresentations of such a serious nature are at the least a civil issue, at the most criminal. I've never heard of a fiduciary responsibility being a defense to what looks like a clear cut case of fraud.
What does WY law say about an RE contract? Here in Indiana, contracts are pretty strong. When we looked at a piece of property we would need a septic. My RE at that time was another local top agent. She and a builder both told me I needed a ground inspection done. Indiana requires a license for such an inspection which is basically a septic permit. I found a local guy and based on his website I hired him. The original owners had plotted out the septic area as a very steep corner part of the lot. The guy I hired is not only a soil scientists, his second business is installing septic systems. He laughed at the plotted area for a system and said there is no system approved in Indiana for that degree of slope. After getting bad samples he asked me if I had tens of thousands of dollars to spend on a system. He said the only system was a newer one called a modified mound and that a newer home two lots away had to use that system. They are very pricey. So we passed on the lot and we had in the original contract wording from his website that the sale was dependent upon my ability to obtain a septic permit of my choice. We had some other wording as well as we needed good drained soil as we wanted a basement. The sellers tried to get us to come back and even got their own report and approval from the county for some sort of system, but what kind they didn't say. We still passed and found a better lot.
I'm in Indiana but might eventually move to another state. Your message is a reminder that no all states work the same when it comes to real estate. I've got some questions though:
#1: Can a buyer only use a seller's agent in Wyoming? Here in Indiana, a buyer should have their own agent. The agents split the commission among themselves. Discounted brokers and such usually have to come to an agreement on how the discounted commission is to be split. I guess if one doesn't want to waste time of another agent, using the seller's agent makes sense.
It's only a recent development in Wyoming real estate agency law that a "buyer's agency" relationship came into being. So, yes, you can … in theory … contract with an agent/agency to be responsible primarily to you, their client/buyer.
The problem here is that the law still specifies that the primary fiduciary responsibility of an agent is to the seller.
So in actual practice, it's a very conflicted situation for the agents. The reality is that a few will be glad to write a "buyer's agency" fee paid agreement but few will actually perform to that level on your behalf as you would expect in other states.
#2: My sales agent is a top producer, yet he can't ethically lie. There were all sorts of protections that all agents have to adhere to (so it works both ways as agents are both selling and buying agents through their career). I had to admit to a surface mold issue which we disclosed. When we had an inspection and there was mold in the crawl space and attic, we had to disclose that as well. Sale still went through though.
It all comes down to how the responsibility for full disclosure is handled in the state.
If the agents in practice are as crafty as dodging the issues as they are in Wyoming as a matter of practice, then it becomes difficult to hold them accountable. In my posts on this topic here, I've had numerous responses where folk acknowledge that getting "straight answers" from the agents was a difficult … if not impossible … process.
I, too, recently sold a SFH in a Colorado resort area. The house had flaws, not limited to "lead paint" and "asbestos" issues due to the era of it's construction, which are required by Fed law to be disclosed. The "disclosure" document that the buyer's agent required us to fill out as a part of their offer was 3 pages long, and it put me and my agent on the spot to honestly report many aspects of the condition of the house. Electrical, plumbing, roof, foundation, sub-surface soil condition (in a bentonite soil area). Documented in writing, the defects which may have been discovered later would have been actionable, with me and my listing agent held responsible. As it turned out, the buyer's inspections for some of the revealed defects weren't satisfactory and they backed out of the contract per their offer. 6 months later, they came back with a much lower price offer and accepted the property. The big issue for them was zoning approval for redevelopment, for which the local Z&P department had mislead me as to what they would allow on the parcel. I had, in writing, a memo from them that the site was approved for almost 8,000 sq ft of residence, but when the buyer submitted his architect's and engineering plans to the Z&P, they balked. It appears that the buyer will only be able to build a 5,000 sq ft residence, which totally turned the real value of the site on it's head.
I've seen agents held accountable to a "higher standard of knowledge" about real properties in other states. IOW, defects in a property which the agent "should have known" and did not disclose to a buyer. Whether or not the seller knew of the problems was no longer the issue for accountability. After the closing and upon discovery of the structure (foundation) issues, the buyer was able to seek damages from the seller and their real estate broker. In one case, the seller knew of the problems and did not disclose them to their listing broker which was documented in a written disclosure document for due diligence by the agency. Nevertheless, the agency was held liable because the agent should have known that the cracks and slight wall displacement in the basement indicated a likely problem (bentonite soil). The issue was significant … a $650,000 house with a $300,000 structural problem. IF this had been a Wyoming real estate deal and the agent hadn't alerted the obvious cracks/displacement problem as something that the buyer should have professionally investigated, there would have been no repercussions and no recourse for the buyer.
#3: How can such real estate agents and property owners not be sued and/or criminally charged with fraud. Misrepresentations of such a serious nature are at the least a civil issue, at the most criminal. I've never heard of a fiduciary responsibility being a defense to what looks like a clear cut case of fraud.
You're making my point for me. That you've "never heard" of this situation is because the law and practice of real estate sales is different here in Wyoming than in the states you are familiar with doing business in.
What does WY law say about an RE contract? Here in Indiana, contracts are pretty strong. When we looked at a piece of property we would need a septic. My RE at that time was another local top agent. She and a builder both told me I needed a ground inspection done. Indiana requires a license for such an inspection which is basically a septic permit. I found a local guy and based on his website I hired him. The original owners had plotted out the septic area as a very steep corner part of the lot. The guy I hired is not only a soil scientists, his second business is installing septic systems. He laughed at the plotted area for a system and said there is no system approved in Indiana for that degree of slope. After getting bad samples he asked me if I had tens of thousands of dollars to spend on a system. He said the only system was a newer one called a modified mound and that a newer home two lots away had to use that system. They are very pricey. So we passed on the lot and we had in the original contract wording from his website that the sale was dependent upon my ability to obtain a septic permit of my choice. We had some other wording as well as we needed good drained soil as we wanted a basement. The sellers tried to get us to come back and even got their own report and approval from the county for some sort of system, but what kind they didn't say. We still passed and found a better lot.
Wyoming law specifically states that the agents primary fiduciary responsibility is to the seller. That means the listing agency and every agent down the line to the buyer that is involved in the sale is held accountable to the seller.
In actual practice, this works out that no agent can say anything that could be construed to be detrimental to the seller.
Wyoming generally requires a well and septic report on properties with these facilities. But the required well report leaves out a lot of potential concerns. For example, the water quality test doesn't require nitrates testing. But I've seen more than a few wells test out with significant levels that had affected previous owners families for years and and have seen a recent buyer's entire family come down with health issues. My recommendation for most folk is that they get their own well water test report and request a much broader spectrum of tests than the law requires.
Do bear in mind that this is a "non-reporting" state. Unless you're a party to a transaction, you cannot know the sales price history of any property. An agent can tell you what they think it sold for, or what they "heard" it sold for … even if they were the selling agent the last time a property sold and really do know. But they cannot legally disclose to you the actual selling price as fact. The parties and the county assessor are the only people who know for sure, and the assessor ain't talking. This is why I urge buyers in Wyoming to seek out an appraiser working on their behalf before making an offer. Relying upon the price representations of a real estate agent here can be an exercise in foolishness, especially when you're trying to find comp's.
I can only reiterate that the agents here have perfected the language arts of non-disclosure and evasion of answers that could be construed to be actionable. It's pervasive, and many agents that I've encountered throughout the state in the last 30 years regard the profession as a waiting game for "found money". The degree of competency, honesty, and ethical performance that you associate with and expect in other states may be a very scarce commodity here.
That's where so many buyers here from out of state get trapped. They make assumptions about properties based upon their knowledge of real estate in other areas. Things like water, easements, adjacent property uses, mineral rights/production, are so different than many other states. Many folk make assumptions and the real estate agent will merely acknowledge that they made the assumption without any further discussion. So, you "assume" that you have a property use or access, for example, because there's a fence line down that way. The agent nods their head and nothing more is said … even when the agent knows that the fence line isn't the property line, or that a neighbor uses that land for their purposes without an easement (example: seller "allows" a neighbor to use a pasture for livestock grazing because the seller no longer has horses/cows … without a lease or contract. The buyer doesn't get notified that there's a historical use of the parcel and the neighbor expects to continue doing so. An established use may, in fact, have rights for that neighbor which can be expensive for the buyer to terminate). There's so many ways that a property purchase here can be conflicted or defective … and a buyer makes an assumption that the smiling agent will correct them or inform them to the contrary. The reality is that the agents here will not do so. Nor will they suggest that you have your own inspections done to verify any statement or aspect of a property.
Let me expand on how far that concept of real estate sales goes here. Many real estate contracts to buy here specify that the "earnest money deposit" submitted with an offer is NON REFUNDABLE upon the seller's acceptance of the offer. IOW, you may later find a defect in a property or have other cause to decline or unable to complete a purchase. They'll let you out of the contract (unless it's specific performance), but retain the deposit as "liquidated damages". Imagine the situation when you've found out the seller hasn't made a significant disclosure about the property and you've real cause to not complete the purchase. In every other state I've done real estate biz in, the buyer was always allowed out of the contract (within a specified time period prior to the projected closing date) and the deposit that was held in escrow was refunded in full.
Here in Wyoming, an agent may have most briefly mentioned that your offer earnest money was non-refundable … or perhaps, not at all. It was incumbent upon you, the buyer, to read the terms of the contract offer you signed. Similarly, I've seen deals done where there was no mention that the seller was not including the mineral rights that they may have owned to a property, with full knowledge that there'd been recent exploration of oil/gas in the area and there were well permits being pulled for the area. While there may not have been any drilling going on in the area at the time of the sale, the seller (and agent) had reasonable cause to know that such activity could be happening in the near future.
This happened to a recent buyer a few miles from my ranch … they bought an 80 acre parcel, built a house adjacent to the county road and settled in. A year later, there's the heavy equipment on site directly across the road … a matter of a couple hundred feet from their doorstep … scraping the site and preparing it for the well to be drilled. A few months later, the well drilling rig comes in, drills the well, and the tankage and equipment is moved in. How'd you like to buy your "dream rural property", build your new house, and then have an oil rig a few hundred feet off your doorstep? Otherwise surrounded by sections of dryland wheat fields, you'd have been mislead into thinking that nobody was going to be nearby to interfere with your quiet enjoyment of your place. Not so, and there's no recourse … oh, and the seller of their 80 acre parcel was the seller of the section across the road where the oil well went in. They knew what was coming. The buyers had seen a few oil/gas wells in the countryside around here, but there was no mention whatsoever by their agent that the "thumpers" had been through the area of their purchase a few years previously and that the well permits had been applied for on adjacent properties … to the extent that down that county road, there's a well permit every mile along the road for 8 miles. Much of it fronted by the dryland wheat farmer's farm.
PS: hey, I'll bet that coming from IA you don't even know about "bentonite" (ie, expansive clay) soils and the havoc they wreck upon some sites. Why? because it's not a problem in your area with a lot of sub-surface moisture and you use Xypex or similar waterproofing below ground level to protect a foundation.
But here in the rocky mountain west, where it's a desert and seasonal sub-surface moisture can present … the shrinking and expansion of the soil where a foundation has been placed can pose incredible displacement of the site and structure. Houses can literally be destroyed by this stuff. And it doesn't necessarily present every climate year. Some houses can go decades without a problem, and then nearby development at another house can alter the sub-surface streams flows. Or maybe an unusually strong series of storm fronts pass through that overwhelm the existing sub-surface flows and flood a generally dry sub-surface area. All of a sudden, a house is having problems because the foundation site wasn't mitigated for the potential. Again, this is a major problem in some of our developed areas which you "wouldn't have heard about" back East because it doesn't present as a problem there. I've seen numerous architects and engineers from "back East" not know about this and many residential and commercial developments in this area adversely affected by this lack of preventative site work.
Just another example of "how different" real estate is here compared to what may be your knowledge base from another area of the country.
In the above post: "The problem here is that the law still specifies that the primary fiduciary responsibility of an agent is to the seller."
It does not look like that is true. The WY statues shows this:
"(c) A licensee acting as a buyer's agent owes no duty or obligation to the seller, except that a licensee acting as a buyer's agent shall not make any material misrepresentation or fraudulent misrepresentation regarding an adverse material fact actually known by the licensee."
I am not picking on you in particular, OP, and don't want you to take offense at my pointing this out. But the 'legal' information looks to be incorrect. Everyone will be best served when any such info is fully researched and properly stated, IMHO. The actual practice in WY and lack of transparency may indeed be different, but to represent it as being legally based seems to be nonsense. And, experience in your region does not give enough perspective to say that it is never the same in MI or VA or NY or AL or wherever. Realtors get sensitized to certain issues... on the Outer Banks of NC, the realtors are very up to speed on things like mold, how rental leases get transferred after a sale, etc. But they generally won't tell you that certain areas get more sound flooding than others in hurricanes, as they cannot fully predict which area 'gets it' in a particular event.
Your stories about the presence of expansive soils in some areas, what can happen with water rights and easements, mineral rights, researching ownership, etc, have great instructive value. Those ARE the things that are 'special' to that certain region, and for those from other areas, that is of great value IMHO.
The examples of mold in houses can and does (happen anywhere) so that should not count as a special WY issue., not how it gets handled.
#3: How can such real estate agents and property owners not be sued and/or criminally charged with fraud. Misrepresentations of such a serious nature are at the least a civil issue, at the most criminal. I've never heard of a fiduciary responsibility being a defense to what looks like a clear cut case of fraud.
And you are correct. Any such fiduciary duty is NOT a defense (though you may have been led to believe that is the case here). WY law is clear that knowledge of any material adverse info is legally required to be revealed. Not doing so subjects the realtor to liability. Whether they so is another matter....
But it always boils down to the details of the case. I was reading a case in Capser recently where a house was sold with a very bad foundation and eventually declared uninhabitable. Due to the circumstances around the sales and the engagement of the realtors, they were eventually exonerated from any responsibility but the homeowner and inspector were still on the hook. (The homeowner had bought it several years before 'as is' with full knowledge of basement problems and did not reveal that to the realtors.)
Quote:
Originally Posted by indy_317
What does WY law say about an RE contract? Here in Indiana, contracts are pretty strong. When we looked at a piece of property we would need a septic. My RE at that time was another local top agent. She and a builder both told me I needed a ground inspection done. Indiana requires a license for such an inspection which is basically a septic permit. I found a local guy and based on his website I hired him. The original owners had plotted out the septic area as a very steep corner part of the lot. The guy I hired is not only a soil scientists, his second business is installing septic systems. He laughed at the plotted area for a system and said there is no system approved in Indiana for that degree of slope. After getting bad samples he asked me if I had tens of thousands of dollars to spend on a system. He said the only system was a newer one called a modified mound and that a newer home two lots away had to use that system. They are very pricey. So we passed on the lot and we had in the original contract wording from his website that the sale was dependent upon my ability to obtain a septic permit of my choice. We had some other wording as well as we needed good drained soil as we wanted a basement. The sellers tried to get us to come back and even got their own report and approval from the county for some sort of system, but what kind they didn't say. We still passed and found a better lot.
I am doing to guess that your realtor was aware of such problems in that area due to past circumstances. Realtors are not omnisicent, and I would not expect them to know a lot about septic systems and sil in general, unless they had run into that before in that area. I don't see where this has to do with strength of contracts but more local knowledge.
Not sure which 'RE contract' you are referring to.... a sales contract? An agency contract?
(snip)
The examples of mold in houses can and does (happen anywhere) so that should not count as a special WY issue., not how it gets handled.
you're apparently not familiar with Wyoming climate issues which make mold on this scale a rather rare occurrence.
Single and low double digit prevailing humidity dry out structures and are a great deterrent to mold growth dependent upon moisture.
that it would present to the extent it does in the house I mentioned with the RE agent ignoring the topic speaks volumes about how the house is being presented. As I mentioned, the problem is so extensive that I believe the house is a tear-down candidate, not a house priced at the top of the local marketplace due to it's lovely location.
RE: buyer's agency practice in Wyoming … yes, there are portions which appear on the face of things to sway a bit in the favor of the buyer. But you need to read what's actually put into practice:
"(C) To disclose to the buyer adverse material facts actually known by the licensee;
(D) To counsel the buyer as to any material benefits or risks of a transaction which are actually known by the licensee;"
It's entirely too easy for an agent to "put on the blinders" and as you point out about septic or other systems … choose to "not know". What constitutes the legal threshold of "knowing"? a smell that the agent detects? or is it reached only when a professional inspection declares a problem and the agent is notified of it?
Then there's this "little detail" about how a Buyer's Agent is to be regarded in handling a transaction:
"Wyo. Stat. § 33-28-304(c). As a Buyer's Agent, Broker has duties to disclose to the Buyer certain information; therefore, the Seller should not tell Broker any information which the Seller does not want shared with the Buyer."
As well, it's informative to note the statute covering the Seller's Agent(s), which would be entered into via a listing contract:
"Seller's Agent. (Requires written agreement with Seller) If a Seller signs a written listing agreement with a Broker and engages the Broker as a Seller's Agent, the broker represents the Seller. On properties listed with other brokerage companies, the Broker may work as an agent for the Seller if the Seller agrees to have the Broker work as a subagent. As an agent or subagent for the Seller, the Broker represents the Seller and owes the Seller a duty of utmost good faith, loyalty, and fidelity in addition to the obligations enumerated below for Intermediaries. Wyo. Stat. § 33-28-303(a). The Seller may be vicariously liable for the acts of the Seller's Agent or Seller's Subagent that are approved, directed or ratified by the Seller.
The net effect and in actual practice here is that there's a lot of "wiggle room" for the agents here to continue to operate with the same tactics, ethics, and honesty levels as they have been doing for many years. Couple that with a RE Commission that chooses to not enforce any but the most blatant documented violations with little more than a minor "slap on the wrist" and the scenario is set for what would be less than proper agent dealings in so many other states. And that's been my point all along here which appears to have anecdotal reports from other folk through the years on this forum reflecting these types of problems here. YMMV. Have a nice day.
Last edited by sunsprit; 11-19-2018 at 12:20 PM..
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