Comments on: When real estate agents practice law…

By: Kary L. Krismer

Kary L. Krismer — Sun, 06 Apr 2008 15:04:02 +0000

There is an out to being in contract in some situations for unilateral mistakes, but I don’t remember at all what those situations are. I’d sort of doubt this is one of them–absent a huge mistake that evidenced a typo (e.g the list price was$399,000 and the offer came in at $299,000).

Sounds like a trip to an attorney would be a worthwhile investment.

By: cpeaser

cpeaser — Sun, 06 Apr 2008 13:51:38 +0000

I need to understand when a contact is considered binding. We thought we were in mutual acceptance after we signed and returned the counter we received from the seller with no changes. Can the seller come back and say “sorry” we made a mistake on our counter? We meant to change the price and just missed that part of the paperwork.

By: craig

craig — Sun, 19 Aug 2007 20:39:25 +0000

Kary -- see my earlier post on this very issue for an in-depth discussion. As a general rule, though, you're absolutely right: if you want to create a binding contract, include a legal description.

By: Kary L. Krismer

Kary L. Krismer — Sun, 19 Aug 2007 04:55:32 +0000

Not that it really matters to the overall message of the story, but I don’t think a tax parcel number qualifies as a legal description. If that’s all there was, I doubt it was a legal contract. The reason it doesn’t qualify is like an address, a tax parcel number can change over the years.

I’d never use just a tax parcel number on a P&S agreement.

By: Diane Cipa, General Manager, The Closing Specialists®

Diane Cipa, General Manager, The Closing Specialists® — Thu, 11 Jan 2007 22:11:44 +0000

Thank you.

Well, it’s fair to say legal standards are not the same as ethical standards and yes, the difference does make me want to vomit sometimes.

By: Ardell DellaLoggia

Ardell DellaLoggia — Mon, 08 Jan 2007 06:14:20 +0000

I don’t think fiduciary standard is relevant to the case here, as Craig suggests.

My issue with fiduciary is the obligation to put the client above self interest. Is there no rule here in WA, either in the Realtor Code or the licensing law or anywhere, that would make it wrong to push a buyer to purchase the house where the agent makes the most money? Especially when in most cases, the bnus fee is not disclosed to the buyer at the time it is happening?

What in WA prevents an agent from being mesmorized by a Bonus Buyer Agent Fee when representing a buyer client? I don’t want to argue about that, I want to throw up about that, if there is no rule against that.

By: Russ Cofano

Russ Cofano — Mon, 08 Jan 2007 03:25:05 +0000

Diane,

You said “The role of a fiduciary includes looking out for the best interest of the principal and so whether or not the real estate agent had a statutory duty to suggest that the seller seek legal advice, he certainly had a fiduciary duty to do so.”

That conclusion is not correct, at least not in Washington state (and many other states that have adopted comprehensive RE agency laws). In Washington, the “statutory” duties have completely replaced the traditional common law fiduciary duties of a real estate agent to their principal. This is the case in many other states, too. So, the only legal standard here in Washington that the agent will be held to is the “statutory” duties.

Russ

By: Diane Cipa, General Manager, The Closing Specialists®

Diane Cipa, General Manager, The Closing Specialists® — Sun, 07 Jan 2007 17:58:10 +0000

Statutory duties are duties you perform as defined by law in the role you are licensed to perform. Fiduciary duties are acts you perform in place of another on their behalf. For instance a title insurance agent sitting at a closing table closing a mortgage loan transaction is performing statutory duties as a title insurance agent and also fiduciary duties on behalf of the mortgage lender. The role of a fiduciary includes looking out for the best interest of the principal and so whether or not the real estate agent had a statutory duty to suggest that the seller seek legal advice, he certainly had a fiduciary duty to do so.

This is a terrific post. Thank you for raising the issue. In the heat of the moment it’s too easy to forget that small acts can turn into big disasters. You are right to help everyone remember where the unauthorized practice of law line is drawn and how NOT to step over it.

By: Reba Haas

Reba Haas — Tue, 02 Jan 2007 19:59:28 +0000

Agents should always meet the guidelines of the statutes that regulate our industry, if a member of the NWMLS they should meet the rules and regulations of that body (and/or the CBA requirements as well), and if an agent is a REALTOR(R) then they should be held to the Code of Ethics standards as well. Not all agents are REALTORS(R) so the code of ethics may, unfortunately, not be applied across the board in terms of complaints against an agent. It’s a shame though. It would be great if more brokers required it as part of hanging an agent’s license in their office.

By: craig

craig — Tue, 02 Jan 2007 18:18:33 +0000

I think everyone agrees that this agent should have told the seller to consult with an attorney BEFORE signing the second offer. As Russ points out, this is a duty imposed by statute. If an agent routinely ignores this duty, the agent could possibly face liability under the Consumer Protection Act. Moreover, I agree that his is not a sign of weakness — just the opposite, in fact.

Jillayne, the distinction between a “fiduciary duty” and a “statutory duty” is pretty arcane and, in most instances, a distinction without a difference. I’ll leave it up to Russ or Ardell (who have crossed swords on this issue in the past) to flesh out the distinctions. That said, the duty would not become “fiduciary” simply because it is so identified in the Code of Ethics. On the other hand, the Code of Ethics arguably determines what would be expected of a reasonably prudent Realtor, and if a Realtor deviated from that standard he/she may be liable.