Are You the Expert?
Sometimes your opinion is valuable in a transaction—
and other times it has no place. Be sure to know the di;erence.
Don’t act as the primary source of information.
Your role as a real estate professional is to arrange and close sales—but that doesn’t
mean you need to be the authoritative source for answers to every question that comes
up. When a buyer asks, for example, how many finished square feet a home has, if it’s in
a flood plain, what the school boundaries are, or when a new light rail line might open—in
other words, anything you don’t know as a fact on your own—be sure to provide the
source of any information you provide in response, says Michael Baucum, a transactional
real estate attorney in San Antonio, Texas. Instead of casting what you say as a fact, say,
“According to” or “The appraisal document says,” or something similar. Those few extra
words could protect you if someone becomes unhappy with something you said.
Don’t weigh in on a home’s condition.
You may be an expert on selling properties—but that doesn’t mean you should be in the
business of advising people on a home’s physical shape. If sellers ask if a system in their
home needs repairs before the property goes on the market or a visitor inquires about
a home’s condition during an open house, resist the temptation to o;er your opinion.
Instead, tell them to consult a certified property inspector, advises Brian Copeland,
chief of broker services for Village Real Estate Services in Nashville, Tenn. “Your job is
to negotiate which [recommended] repairs to do,” not decide if something needs to be
fixed, says Copeland. “We are not contractors or structural engineers. We are marketers.
Our expertise is to keep the deal together and make the customer happy. Giving opinions
outside of your expertise is a huge legal pitfall.”
Don’t declare whether a neighborhood is “safe.”
You may have opinions about whether a particular street is safe or dicey, but sharing how
you feel could be a fair-housing violation. Your best bet is to let clients know that you can’t
answer questions about whether a neighborhood is safe. Instead, point people toward
crime statistics and other objective data, or recommend they look around the area at
di;erent times of day on their own to get a firsthand view of what it would be like to live
there, says Copeland. “It’s a slippery slope, so you have to be a steward of your words,”
says Copeland. “You can’t let your guard down and start saying things that don’t have a
place in our profession.”
Avoid giving tax advice.
Buyers and sellers might ply you with questions about the tax benefits and implications
that relate to a home transaction, but your answer should always be the same: “
Consult a tax professional,” says Jim Downing, a sales associate with Berkshire Hathaway
HomeServices Florida Properties Group in Clearwater, Fla. Even basic questions with
seemingly obvious answers, such as whether mortgage interest is tax-deductible, could
invite trouble, because no two people’s financial situations are identical.
Avoid deciphering HOA rules or budgets.
Your clients have decided to buy a condo and now have to dig through a thick stack of
paper concerning the rules and finances of the building they want to move into. Interpreting the documents and helping your clients decide if they’re acceptable might be a tempting way to demonstrate your value—but this is work best left to an attorney, Downing says.
Keep a record of what you say.
Just as having a log of how many miles
you drive and where you go can help
you at tax time, maintaining an accurate
record of what you discuss with clients
can prove very useful if you have to
recall what you said at some point in the
future. Knowing that he might need to
reconstruct the details of a conversation
long after it occurs, John Shipman,
director of green operations for Coldwell
Banker George Realty in Arcadia, Calif.,
makes a habit of writing down what he
says in meetings, along with the date and
time. “I’ve always been told by attorneys
that if I said something but it’s not written
down, it never happened,” Shipman says.
Be upfront about whom you’re
working for. Be sure to explain that your
duty is to the seller before discussing a
property with people who stop by an open
house or contact you based on a sign
or advertisement, advises Mike Hege,
broker-in-charge at Pridemore Properties
in Charlotte, N.C. Doing so could help
prospective buyers avoid inadvertently
breaching an agreement they may have
with a buyer’s agent—and it could help
prevent you from entering an undisclosed
dual agency situation, too.
Using an incomplete property
description. A property’s street address
may be all you need to find it on a map, but
you generally have to give more specific
details—such as lot and block numbers—
to properly fill out real estate paperwork.
“Laws are very exacting regarding what
constitutes a legal description,” and you
could find yourself with an unenforceable
sales contract if you don’t provide the
required information, says Michael
Baucum, a transactional real estate
attorney in San Antonio, Texas.
REALTORMAG. REALTOR.ORG REALTOR® JULY/AUGUST 2016 33