I'm working with a buyer who would like to purchase a home from his friend. The friend/current owner bought the home three years ago for a price that was way above what it's worth even today. He said he was not provided market comps when he purchased.

The seller took back a second lien since my client's friend was only approved for 80% of the asking price.

Here is where this gets complicated:

1. The seller was a licensed real estate agent who was being represented by another agent.
2. The seller/agent is not a member of the board, but the agent she used (from another broker's office) is a member.

It seems as if the seller and her agent, both licensees, did not provide enough information to the buyer and sold the home for 20% above current market price (the amount of the 2nd lien).The agent doesn't want to drop the second lien, so my client and his friend would like to make a formal complaint.

QUESTION: What would you do?

Formal complaint about what? I guess I don't understand the complaint. The friend/current owner paid more for a home that what it was worth. That is done all the time, the current owner, I am assuming acted on his own free will when he bought it. It doesn't appear from your post that he was represented by his own agent. The current price would have to be sufficient to pay off both liens.

If the bank gave a loan for 80%, they must have ordered an appraisal. The appraisal would show if it wasn't worth what the selling price was. If that was the case, your friend DID have all the information before the purchase.

So long as that seller's agent has an IABS form that was signed by the purchaser then the proper agency disclosure was made; the agent worked for the seller and not the buyer.

On what basis is the complaint being made?

There is no requirement that a seller's agent provide a CMA to a buyer.

In answer to your original question: No, I would not get involved in this complaint based on the info provided in your post.