be published Monday, May 17, 1999
Buyer beware, because agent may not be awareDoug Grow / Star Tribune
Oh, the thrills and excitement. After years of planning and saving, excavation on the dream home of Dave and Alicia Jacobsen began in March.
But a few days after work started, they received a phone call. The conversation went something like this:
"Why are you building on this lot?" the caller asks.
"Because we're having our home built," Dave Jacobsen responds.
"But it's not your lot," the caller says.
"I think we have a problem," Jacobsen responds.
He was right. The Jacobsens have an agonizingly simple problem. They own one 10-acre lot -- but they have a basement on another 10-acre lot a few hundred feet from the lot they own.
Exit the construction workers, enter the lawyers.
"The bottom line is that it's going to take me $30,000 to get out of the lot," Jacobsen said. "I have to rip out the foundation, fill in the hole, remove the gravel from the driveway. To fill the hole, you don't just push the dirt back in. You have to have a compacting machine. Plus, then I'll have the cost of new excavation."
There is good reason for the Jacobsens' costly mistake. They believed their real estate agent would know the difference between land that was for sale and land that wasn't for sale, which, given the fees charged by real estate companies, doesn't seem to be a lot to expect.
In 1997, their agent, from Coldwell Banker Burnet, stood with them near Lakeville on the lot they thought they were buying. They told their agent they wanted to buy the land they were standing on. The salesperson submitted the Jacobsens' $60,000 offer to Edina Realty, which was representing the owner of a lot. The deal was done. The two real estate giants, Burnet and Edina, collected their shares, about 3.5 percent each. The landowner of the nearby lot collected the rest. The Jacobsens had their 10 acres of dreamland. And, until the big oops was discovered, everyone lived happily.
"Even Burnet's saying they took us to the wrong lot but now they won't do anything about it," Jacobsen said. "I don't understand it."
The Jacobsens, who hoped to move into their new home in August, want to build on the land they actually bought. But they need the money they have invested in the land they don't own before they can proceed. An effort to swap the land they own to the woman who owns the land they started to build on was stymied when the landowner said no. So, they have hired an attorney, Adam Dowd, who says he'll file a suit against Coldwell Banker Burnet, probably this week.
"I want to be clear about this," Dowd said. "This was just a goof, that's all it was. The Jacobsens aren't seeking any additional damages; they just want to build their house. They should be able to go to the parcel they do own without any additional cost to them."
Burnet isn't happy about attention it's getting because of this transaction gone awry -- if only by a few hundred feet. Leonard MacKinnon, a vice president of communications for Burnet, didn't sound pleased when he received a call from me about the Jacobsens' woes. He said his company has "30,000 or 40,000 transactions a year; you might have an error here or there."
But isn't this a rather substantial blunder?
"We're trying to work it out," he said. "But what this is is a case of the misplaced lawn sign."
Burnet believes that Edina Realty should share the cost of getting the Jacobsens back into the home-building phase of their lives.
Tom Raymond is Burnet's trouble-shooter on the case. He said "the [Burnet] agent acted with reasonable care." He also said that the "unfortunate incident" occurred because the travel directions issued by Edina Realty for getting to the property weren't clear and that a survey was difficult to read because all lots in the area have similar dimensions. Beyond that, Burnet said there there was an Edina Realty for-sale sign on the property, even though the lot wasn't for sale.
"It's a strange set of circumstances that all came together," MacKinnon said.
Edina Realty shows little sympathy for its fellow real estate giant. Lynn Leegard, attorney for Edina Realty, doesn't accept that there was an old Edina Realty sign on the property the Jacobsens thought they were buying. Even if there was an old sign, Leegard said, Burnet should have been able to find the right property because Burnet had been supplied with an accurate survey of the land.
"I think the agent representing the buyer has an obligation to show the right property," Leegard said.
Dowd, the Jacobsen's attorney, said it's Burnet alone that has responsibility to the Jacobsens. If Burnet has problems with Edina Realty, Dowd said, the two real estate companies can have their own fight.
Meantime, the Jacobsens are left with a basement a few hundred feet from their property.
"I guess I should feel lucky we didn't get the whole house built before we found out we were on the wrong land," Dave Jacobsen said.
© Copyright 1999 Star Tribune. All rights reserved.