Family fooled by broker

Photo: Sander Ilvest

«In my desperation, I hope you will help us find out the truth in this matter,» wrote Kärol Kõu, a mother of three, after a tussle with a real estate company. With her husband Mario, Kärol had spent ages to find a little house on the complex Tallinn real estate market as a home to replace current tiny apartment. At long last, one was located – a house, a bit tired and discoloured, at Vuti Street. Little did the family know what was in store.

Events begun to unfold at the beginning of April as the couple decided to go have a look. They liked the house and on the very day started talks with loan administrator at a bank. There and then, the declared being interested to the Domus Kinnisvara agent Marju Mölder, with a promise to get more definite regarding the deal at the start of next week.

House not booked

The next time they visited the house was five days later. Then, they asked Ms Mölder when they’d have to officially book the house. The agent advised that they wait while the valuation reports have reached the bank, been reviewed by the bank and received specific assessment. As witnesses, the meeting was attended by two more persons who confirm what transpired.

A day later, the young couple attended loan administrator consultation at the bank where they were told their solvency is okay and all they needed now was valuation reports. The issue was rather how much more they could borrow, as extra for renovations. After the encouraging meeting at the bank, they called the agent and agreed a time with the evaluator.

On Wednesday, Domus Kinnisvara evaluator Roomand Saar visited the house and promised to get everything ready by the day after, and to send both reports Friday morning to Kärol Kõu and loan administrator. But the reports never came. From there, the developments turned weird.

On the afternoon of the agreed day, Kärol Kõu tried to call the evaluator but to no avail. Thereafter, she got a call from the agent who was «sorry to have bad news».

The agent told the young family that her priority was the interests of the customer (the seller  – edit) and the family would have to be reconciled to not getting the house, as a new buyer had been found. In the morning of that day, the evaluator had been ordered by his boss Rando Vanaveski to send the money back, instead of forwarding the reports.

Disappointed, the young family thinks something smells bad and the whole story would be a cover to sell the house to the real estate company or a straw man of theirs, to sell at great profit later. «The evaluator said the land alone was almost as expensive as the house. By fixing the house up a bit, the immovable might earn a lot of money; however, we just wanted to build a home for us and the children,» said Kärol Kõu.

«If Friday night Rando Vanaveski said he knew nothing about the matter, how then could he have issued a command to the evaluator Friday morning,» wondered Ms Kõu. «I consulted a jurist, but he said it was word against word and legal help is out of question.»

«Something we are not getting here: how come they found a buyer out of the blue when we were never mentioned there was another. Why let us evaluate the house and talk business at the bank? We would have definitely reserved the house had we known all that,» said Ms Kõu.

Court of honour convenes

Domus Kinnisvara regional manager Rando Vanaveski rejected all accusations. According to him, the agent had told the family that many were interested in the object and it could not have come as a surprise – another matter being if Ms Kõu paid attention to that or not.

Before and after Kärol Kõu visited the site, there were those who called and took a look. Mr Vanaveski admitted, though, that definite interest was lacking exactly to the point in time that somebody was inclined to buy. The family was supposed to know that sales activity continued; it continued as long as the house was not reserved.

As explained by Mr Vanaveski, the family’s loan capacity was in their own words «just close» and therefore they desired to negotiate the price down. Meanwhile, lowering the price was not in the interests of the customer, so they decided to move along with a buyer who had the cash at hand.

«When it comes to payment of booking fees, we are very cautious with advising those interested to enter into binding agreements and payments of larger sums, especially when the clients themselves are obviously in doubt regarding their borrowing capacity,» he said.

The real estate company assured Postimees that large brokerages never go for strategies as suspected by the family. The immovable was not sold at a higher price, but for the sum desired by the client – agent’s fee also remaining the same.

«The buyer of the immovable is in no way related to Domus Kinnisvara and in case of doubt anyone may check this on basis of entries in land register. In this transaction, our company has no conflict of interests,» explained Mr Vanaveski.

Domus Kinnisvara will compensate deposits paid for the expert assessment for house at Vuti St and additional collateral. Kärol Kõu has filed a complaint regarding the agent to Estonian Chamber of Real Estate Brokers, in near future to be deliberated by the chamber’s court of honour.

Comment

Daniel-Aleksander Chasan

Chairman of Court of Honour, Chamber of Real Estate Brokers

Usually, all problems arise from communication and notification. Often, things aren’t explained sufficiently and misunderstandings follow as people who do not deal with real estate in their everyday life and have no contact with the domain do not know the established rules of the game.    

A problem is the ads which are far from corresponding to reality, and the situations where customers are busy with banking transactions and it turns out for some reasons during that time the immovable has been sold. There are rather many reasons and nuances of this sort and every case is somewhat unique at that. The court of honour is addressed rather rarely; mostly, we have to deal with simple issues and enquiries. The more serious cases that are treated deeply happen once or twice a month. Mainly the problems arise with brokers who are not members of our chamber, nor professionals in the field. If a professional broker has erred, the court of honour can issue a reprimand and end up revoking the professional certificate.

I always advise that people employ members of the chamber or professional brokers as this serves as additional guarantee of these people possessing certain competency and they have a serious attitude.

In Estonia, real estate brokers are under no obligation to possess a licence or professional certificate; in several countries in Europe things are otherwise.