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Remember Marty Ummel?

Do you remember this woman? She is the one who filed a lawsuit against a RE/Max agent named Michael Little who she and her husband accused of selling them a $1.2 million home they say was worth substantially less.

See our previous posts entitled Ummel’s Talk, You Decide and Ummels VS Re/Max.

Marty Ummel appeared on national television news programs such as the Today show claiming that she and her husband, Vernon, were deceived by Little in the process of making their purchase.

A jury of twelve (10 women, 2 men) were not convinced and delivered a unanimous decision after a quick two hour deliberation declaring that Little did not breach his duties and was not negligent in his actions on behalf of the Ummels.

Wendi Brick, jury forewoman, explained the verdict by saying, “We felt that yes, he had acted on their behalf, and we felt he met his fiduciary duties as defined…In any kind of purchase, especially one that big – and most of us have had our own situations we’d been through – the bottom line really stops with you. Whose final responsibility is it to sign a contract? It’s yours…”

Little described his feelings by saying, “I feel incredibly relieved and vindicated…it has been more than two years of quite problematic times for me, and I’m happy to get it behind me.”

Bug! It’s a Real Estate Brand

Bug! It’s a new real estate franchise brand. No fooling! Although REALonomics cannot address the financial model behind Bug Realty, the brand image has been carefully orchestrated to convey simplicity, frugality and of course, fun for consumers. In this sense, we believe the wearied and worn consumer will easily recognize and identify with this brand. After all, who doesn’t know the Bug?

That isn’t all bad in today’s tired and shop worn real estate industry. The branding concept utilizes the Volkswagen Beetle Bug as an icon. Geek Squad gone realty! The power behind the brand is the natural, built-in consumer predisposition toward the Bug…I’m talking Beetle Bug.

REALonomics would like to recognize Bug! as Model Perfect from the standpoint of their keen attention to new brand creation. Watch for our REALonomics Interview with Bug Realty Founder and CEO, Kevin Seney.

What Bug Realty wants to convey to the consumer is their deliberate lack of pretense…simplicity is the idea behind the message as contracted with the big and brassy brand message of some other franchises.

Bug! touts a no-frills, no-hype real estate model. Bug! agents drive the Volkswagen Beetle in order to drive home (no pun intended) the idea of simplicity and no frills.

Bug! resists the idea of being labeled a “discount” brokerage company, opting instead to convey to consumer that they reduce costs by eliminating things like inefficient advertisement in favor of streamlined operating systems. Bug! agents conduct their business with wireless technology solutions with full access to MLS property information via the Company’s intranet, laptops and of course, cell phones.

Founder and CEO, Kevin Seney, said this about current brands, “Their brands are stale, they’re institutional. The communication they’re sending out to the marketplace is we’re big, we’re fancy, and we sell estate homes. But that image doesn’t work anymore.”

REALonomics congratulates Bug Realty for its marketing design that is truly innovative, fresh and recognizable in an industry that desperately needs fresh paint and new screen doors.

Watch for our REALonomics interview with Bug Realty Founder and CEO, Kevin Seney.

Ummels Talk – You Decide

This is a follow-up to our post “Ummel VS ReMax” on January 25, 2008. REALonomics analyzed this interview, not to determine the accuracy of the claim but rather, to get inside Ms. Ummel’s head and ascertain the mentality behind the suit from a consumer’s standpoint. Admittedly, getting inside someone’s cranium is an illusive art form, but in this case we are simply looking for attitude, motive, emotional state and other factors that may serve as a consumer’s motive for such an action.

We are trailblazers…we want to change the industry. We feel we were misled…we do feel angry…we hired our agent because he was a real estate professional, he was expected to do the due diligence…and they (agents) have a code of ethics where they must put the buyer’s first…I think he just wanted to go ahead with the sale and make his commission…he was not concerned about our best interests. We feel that the appraisal was manipulated…we feel that the agent had something to do with that…

Source: Today on MSNBC.msn.com

Ummel VS ReMax

Back track mentally to 2004 and the market boom.

Meet Vernon and Mary Ummel (ages 71 and 60, respectively), San Francisco area residents.

Enter Mike Little, agent with ReMax Associates in Carlsbad, California, the destination market for the Ummels and their relocation plans. Toss in Geoff Mountain, a co-owner and Broker of the firm.

Fast forward to purchase contract executed by the Ummels in the amount of: $1.2 million.

Add a twist…Mr. Little also managed the mortgage piece for the Ummels.

Factor this…the seller was a real estate agent.

Throw this into the soup: The Ummels claim no comparables were shown to them prior to contract and that better values were available at the time they purchased and the appraisal amount was not disclosed in writing prior to close.

There’s more. The Ummels have already settled part of their suit with the mortgage company and the appraiser. Translation: Errors and Omissions insurance paid off the Ummels..

The claim by the Ummels is that they were duped, so to speak, into buying a home that was not the best bargain in the neighborhood, since others, they claim, were being sold for close to $175k less. The agent didn’t exercise fiduciary, so they claim.

On Monday, the lawsuit lands in Superior Court.

Imagine a jury of peers judging this one…most of whom will own properties in California that are probably not worth what they once were. Ouch!

All the earmarks are here. Agency, disclosure, price opinions, ABAs, RESPA and more.

Is the class action blame-game lawsuit trend about to evolve, complete with vulnerable adult statutes in play and treble damages? Lawyers are no doubt salivating and Errors and Omissions companies shaking in their boots.

According to other news outlets, Mike Little calls Ms. Ummel a “nut job.” Hmmm…not nice. Mike, here’s some advice from REALonomics; if you did say that, shut up.

This puppy could go either way, not because of the validity of the suit but because the consumer (remember them?) (a) loathes the industry; (b) wants to blame the industry for the decline in values; and (c) jurors may be sympathetic for self-serving reasons (their own property values).

Our opinion: The suit, if properly contested with adequate counsel, will fail and we hope the brokerage firm does not settle, which could open a pandora’s box to E&O claims.

Keep an eye on this.

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