February 9, 2012
Yes, it’s me again. The past week has been very busy in the legal department, a sure sign that the spring market is starting early this year!
First of all, I wanted to thank all of you for the positive response to the first edition of the weekly "Everyday Risk Management" email. I appreciate all of the feedback received, especially an offer of assistance from Woody King in submitting, and responding to, additional legal Q & A’s for future editions! This will allow you, the agent, the very best guidance in the risk management area…truly all best practices jammed into one weekly email!
Following are (3) of this week’s top questions:
“Jim - Do I, as a buyer's agent, have the right to present my buyer’s offer directly to the seller or be present when the offer is presented?”
NO. There is nothing in the law that grants you this right.
EXCEPTION: However, a seller may wish to have the cooperating agent present the offer. Your buyer (yes it needs to come from the BUYER, not you as the agent) may request that the buyer’s agent (You) present the offer directly to the seller if written into the purchase agreement. You need to be VERY careful with this. The seller may simply reject your offer based upon this verbiage, or worse yet… accept a different offer causing your buyer to lose the home. I would ONLY recommend this for a large commercial purchase or very specialized transaction. See your manager for training and or details.
“I have a beautiful home listed and finally received an offer, but the wife is on vacation and can't be reached. The buyer wants an answer. Can the husband sign the contract on her behalf?”
Well, the husband can sign on her behalf, but it’s not a binding agreement. In fact it’s worse than you think. Picture this: because you recommended it and acted as if it’s a binding agreement, the buyer moves ahead with the transaction, orders the appraisal, gives their thirty day notice to the landlord, the landlord leases the apartment to another party, the buyer accepts the job transfer, the employer hires someone to replace them, etc. Then, in ten days the wife announces she fell in love with the bartender while on vacation and she never signed the purchase agreement. Wow! You will have a lot of questions to answer. Just see your manager.
Bottom line- get the signatures. The same logic also applies to the “the seller authorized me to accept the offer via phone call.” It’s not an enforceable contract. Next time have the wife sign a power of attorney prior to leaving on vacation. Our title company will be happy to supply one.
“I recently left my former company to join Prudential. I left on good terms. I had one pending transaction that is now about to close. Is that commission paid directly to me from my old broker or thru Prudential?”
If the transaction is owned and controlled by the former company and their name is on the top of the purchase agreement - then yes, the payment is made directly to you from the former company. This applies if the agent moves to another company, retires, and even if the agent becomes incapacitated or dies. The State still allows the former broker to pay the agent or their estate.
The State frowns upon brokers that do not pay their agents for transactions where the agents have earned a commission. I'm very proud that Prudential has always supported the agent, whenever an earned commission is received.
If you have any questions, please feel free to email myself or Woody King.
Remember: the only thing that ruins a great year is a great lawsuit!
Go get em!