Comments on: Using an agent to buy a house? That is soooo 20th century…

By: ARDELL

ARDELL — Mon, 02 Feb 2009 17:12:35 +0000

Beginner,

State laws are different in California than Washingington regarding who represents whom. Though in your situation, you may not have had a different experience, it is important to point out the difference for our local readers.

In California, anyone who hangs a license with the same broker of record, and agent in the listing agent’s office, represent the seller. So the only to have your own agent is to not call the listing company at all. Double check, but I haven’t seen any change n their agency laws in the last 5 years.

Washington has Designated Agency where the only person who represents the seller is the listing agent and every other agent with any company represents the buyer. There is only Dual Agency if the agent is the listing agent, not the listing company, in WA vs. CA.

By: Beginner

Beginner — Mon, 02 Feb 2009 08:04:37 +0000

Hi, I am in the San Francisco bay area and looking to buy. I want to search and see properties myself, and then let an agent or real estate lawyer (if I foresee a complicate transaction) handle the paperwork. I am not so concern about the commission but I just want to search and check out the property myself. One listing agent showed me the property and I also went to an open house. Then I searched something I liked and I called the listing agent to schedule a visit. That agent told me either her or her associate would be at the appointment. Her associate came and I told her I was looking on my own. She showed me the property “like a sales talk”, I want to turn on all the stuff to make sure they were working and she said an inspection would take care but I started turning on the switches and then she helped me. At the end I told her if my want to offer, I would have someone to draft and present it to her. Then she said she thought she would automatically became my agent and draft the offer. So I told her you were send by the listing agent representing the seller. (If she weren’t so seller-oriented, I might have considered that because I haven’t decided which agent to become my agent). If I use her, that would be dual agency and yes, I read the book which tells buyers to run from dual agency because of conflicting interests. You see some people got into real estate just for the money!
Anyway, when I call a listing agent next time, I will ask if the listing agent is willing to show me without becoming my agent. To me, if the listing agent isn’t, it’s like a sales person who wants to get commission without wanting do to any product demo.

By: Buying without an Agent — the Epilogue | Seattle Real Estate ~ Rain City Guide

Sat, 30 Aug 2008 04:30:11 +0000

[...] the last year, I’ve posted several times on using an attorney – rather than a real estate agent — to purchase a home. As [...]

By: craig

craig — Wed, 02 Apr 2008 16:11:43 +0000

HAH! There already is a Mrs. Craig — and she’s a totally hot DOCTOR! Ya’ know, momma always said to marry a doctor… So, no interest in any other “business” arrangement. But I like the way you think, Kary…

By: Kary L. Krismer

Kary L. Krismer — Wed, 02 Apr 2008 15:58:44 +0000

This discussion of combining a real estate business with the practice of law is far too complicated. The a much easier solution would be for Craig to marry a hot real estate agent! This assumes there currently is no Mrs. Craig, or if there is, that she wouldn’t agree to step aside to allow this business arrangement.

By: craig

craig — Wed, 02 Apr 2008 15:32:08 +0000

Well, that was just a shot in the dark about the MLS rules — you weren’t supposed to call me on it! I don’t have the RPCs in front of me, but as a general rule they prohibit lawyers from being in business with non-lawyers. Also, there are problems with the legal fee being paid by someone other than the client (a problem when representing the buyer) and also with the sharing of legal fees. I think those rules would generally not allow an attorney to hire a broker. If a firm was to employ agents, the only way it would work — if at all, as the RPCs can be very restrictive — would be if the attorney was also a broker who then signed the agent’s license.

By: leanne finlay

leanne finlay — Wed, 02 Apr 2008 15:16:50 +0000

Craig, I don’t think it’s the wave of the future or anything, but I don’t know why it would run afoul of MLS rules, do you have any thoughts as to why?

To me, capable is capable, and if I’m working with another agent on a transaction, I want capable. I see no reason why working with an agent who was employed, either as an employee or independent contractor thru a law firm would be a problem for me as an agent.

I can’t say that a law firm real estate agent would be any more attractive to a potential client or less. Valid competition allows for all agents to discuss their individual services and fees with clients, and clients can choose the model they want to work with.

By: craig

craig — Wed, 02 Apr 2008 15:03:32 +0000

Kary — I think your analysis is right on the money. Any less-than-full-service agent could run afoul of the rule established by Cultum v. Heritage House, given the language of that case.

Leanne — no, a referral fee is probably not allowed under the RPCs. Could a law firm hire a broker as an employee, and then allow the broker to sign the licenses of agents, who are also employees? An interesting question. I don’t think that is prohibited by the RPCs, but it may run afoul of the MLS rules.

By: Kary L. Krismer

Kary L. Krismer — Wed, 02 Apr 2008 14:22:59 +0000

Leanne wrote: “Doesn’t the State of WA allow an attorney to become a broker without the 2 year salesperson rule (pass the test, take the clock hours of course)? I thought they did?”

Yes attorneys in certain instances can become brokers or certified instructors prior to two years of being an agent. The process is not entirely clear to me.

By: Kary L. Krismer

Kary L. Krismer — Wed, 02 Apr 2008 14:19:59 +0000

Craig wrote: “Finally, I’d be happy to help that mother or daughter with a contract. Have them give us a call — or at the very least do NOT let them pay an agent a significant sum for this service (>$1k) — which, btw, very well may constitute the unlawful practice of law.”

I’ve wondered whether firms like Redfin will get in hot water if they try to move into a state where attorneys are more active in real estate transactions. But for the fact that Redfin will show properties for an hourly fee, they seem to be setup more like a law firm than a real estate firm. For example, as I recall, one of the facts our Supreme Court mentioned in the case allowing agents to complete forms was the need to do them quickly, compared to attorney office hours. In this area Redfin might be more like a law firm. But also, where they may not typically see the property, again more like a law firm.

I think Craig was trying to apply this to a slightly different situation (an individual agent writing a contract for a fee). I agree that’s possibly problematic. But I’m saying something more. The more that an agent/firm limits what they do in the way of services, the more likely it is that what they’re doing could be seen as the unauthorized practice of law.