April 11th, 2022 at 10:31 am
Agents should always exercise caution when placing ads in the MLS, flyers, and other marketing materials. When problems arise, buyers and buyers’ agents often refer back to your ads try to hold you accountable. (more…)
April 5th, 2022 at 11:44 am
Multiple Choice Question: April is National Fair Housing Month! Let’s test your knowledge of the fair housing laws. Which of the following is not a fair housing violation for a residential landlord who is pre screening a prospective tenant? Pick the best answer:
A. Refusing to rent to someone with children.
B. Refusing to rent to someone who receives Section 8 housing assistance vouchers.
C. Refusing to rent to someone who is not a U.S. citizen or legal resident.
D. Refusing to rent to someone with a criminal history.
E. None of the above. (more…)
March 28th, 2022 at 2:45 pm
In this hot housing market, agents have been using C.A.R.’s Single Party Compensation Agreement (SP) quite a lot. Please refer to the Legal Tip of the Week for the last 3 weeks for some guidelines on using an SP. For this week, we will consider the agency issues surrounding an SP.
When a seller does not want to enter into a listing agreement with you, but is nevertheless interested in paying you if a certain buyer buys the property, you must be careful selecting your agency relationship with that seller under an SP agreement. If you and the seller agree that you will be the seller’s agent, you will owe the seller a fiduciary duty of utmost care and integrity. You should generally refrain from taking on that much liability, unless you will be getting paid accordingly (e.g., a total SP commission of 5%, rather than only 2.5%).
Here are the different types of agency relationships that can be established using an SP: (more…)
March 21st, 2022 at 3:33 pm
Background: The Single Party Compensation Agreement (SP) has become quite prevalent in the current hot housing market! The Legal Tip of the Week from 2 weeks ago explained how to use an SP when a seller does not want to list the property with you, but is interested in paying you a commission if a certain buyer buys the property. The Legal Tip from last week showed you how to further protect yourself using a Buyer Broker Agreement (BRE) at the same time. This week we will discuss what to do if you do not want to reveal the identity of the buyer in the SP before the seller signs.
Fact Pattern: You represent a celebrity, Bedazzled Buyer, who is interested in purchasing a property that is not listed for sale. Bedazzled has signed a BRE with you. You nevertheless want to get the owner to sign an SP to pay you if Bedazzled buys the property. You are, however, worried about revealing Bedazzled’s identity on your SP in case the seller tries to cut you out of the deal.
Multiple Choice Question: If you identify Bedazzled as the buyer on your SP, can the seller elect not to sign your SP and just contact Bedazzled directly? Pick the best answer:
A. No, because the seller must deal directly with you, not the buyer, under the NAR Code of Ethics.
B. No, because the seller must deal directly with you, not the buyer, under the BRE.
C. No, because the seller only found out about Bedazzled through your SP.
D. None of the above. (more…)
March 14th, 2022 at 2:05 pm
Question: In last week’s Legal Tip, we discussed how you are working with buyers who are very interested in buying a home in a certain neighborhood that has virtually no properties for sale. You decide to embark on a “farming campaign” to find an unlisted home for your buyers to buy, and one of the homeowners expresses an interest in entering into a Single Party Compensation Agreement (SP) with you. However, because you don’t know whether the homeowner will sign your SP, what other document can you get signed to help make sure you get paid? (more…)
