What should an agent disclose when selling her own property?

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A man in a suit sits at a table and holds out the palm of his hand. On top of his outstretching palm is drawn a white outline of a house.

01/22/2016 | Author: Editorial Staff

One of my agents wants to sell her home without listing the property with our firm or any other firm. She’s not advertising the property through the MLS, either. What disclosure must she make about her status as a real estate agent?

She should inform any buyer that she is a licensed real estate sales agent acting on her own behalf—either in writing before entering into a sales contract or by disclosing the information in Paragraph 4 of the sales contract. This disclosure is required by TREC rules.

The Code of Ethics outlines similar requirements in Article 4 and Standard of Practice 4-1. In addition, Standard of Practice 12-6 requires REALTORS® to disclose their status as owners or landlords and as REALTORS® or real estate license holders when advertising unlisted real property for sale. Similar rules apply when license holders intend to acquire property on their own behalf.

These disclosure requirements are intended to ensure the public is informed of an agent's license status when buying real estate from the license holder, and to avoid claims that a real estate license holder was using her undisclosed license status and expertise to take advantage of a member of the public. 

Read more legal FAQs on texasrealestate.com

Categories: Ethics, Legal
Tags: legal, legal faq, ethics, code of ethics, disclosure


Comments

Theresa Akin on 01/31/2016

I personally would consider it a slap in my broker’s face.  Being sponsored by a brokerage and not listing your property in the MLS and not wanting to give the firm acknowledgment.  Also that information is used for comps for that area. If you think you’re going to come out a winner, in my book, loser.

Darrell Drouillard on 01/29/2016

It is amazing to read Mark’s reply. It’s almost like I wrote it myself. I also deal in real estate for myself and have rentals and have bought and sold homes as I have moved. I have 7 homes currently and got into real estate for the objective of being able to represent myself in my own transactions. I just became a broker and intend on continuing to be my own boss. I would never consider letting another 3rd party represent my interests better than I can.

And being that I look at all deals as a numbers game, there is no emotional attachment to a piece of property….ever.

Mark Ring on 01/29/2016

I could not disagree with Candy more.  One of the primary reasons I obtained my license was to not be forced to pay the full commission on my property sales.  I buy/sell rental properties frequently and would never consider using another to do my job.  If used other agents for my own transactions I would be giving away hundreds of thousands of dollars every year in commissions.  Only a fool would do such a thing.  I always pay the buyers agent commission and in most cases I prioritize offers where the buyer is represented over non-represented as a middle man is a plus when dealing with emotional uninformed buyers.

My own home is no different.  I have no attachment to a piece of property and I have no problem at all selling it.  I disclose all known defects, review all comps, take the condition of my home into consideration and list/sell….its not hard to remove emotion from a transaction.  As an agent I know what my property is worth and I have the comparables to back that up.  Its not at all difficult to come up with unbiased listing price and negotiate with potential buyers.

The last time I sold my own house I was under contract within 24 hours and the house sold at a higher price than the other comparables.  The Buyer’s agent was concerned about the home appraising, and as it turned out, everything was just fine.  We navigated every pitfall, from termites, to set back issues, warranties, and repairs.  All of this was done in the same professional manner I navigate these issues with my own clients only without the middleman looking to get me to compromise and ensure they got their commission.

If you are informed, know your market, and are able to be deal with issues without emotion there is no reason in the world not to represent yourself.

Ariel E. Axelrod on 01/29/2016

Rodney, that is a commonly held belief that is incorrect. NAR’s MLS Anti-Trust Compliance Policy specifically address off MLS listings. See #7 at:

http://www.realtor.org/handbook-on-multiple-listing-policy/policies/policies-mls-antitrust-compliance-policy

It states ” Prohibit or discourage participants from taking “office exclusive” listings; certification may be required from the seller or listing broker that the listing is being withheld from the MLS at the direction of the seller.”

Ginger Coolidge on 01/29/2016

Candy, I disagree with having another agent list it, however, I do always make sure the buyer is represented and I normally list it in the MLS, and pay the buyer’s commission.  It depends on the circumstances.  I’ve had rentals where the tenant wanted to buy the house, one used a buyers agent at my recommendation and one did not.  In all cases it’s disclosed in the contract.

Candy Cargill on 01/28/2016

I do wish her the very best of luck.  What is the old saying about the lawyer representing himself has a fool for a client??? 
I personally would advise her to list it with another agent in her company. 
Just as we have to tell our clients to look at the property through the buyer’s eyes, she will have to do the same.  If it is her home, it’s going to be harder than she may think.  It’s another story if it is investment property. 
We spend hours learning how to teach the public to trust REALTORS…please do the same, they will keep you out of trouble.

Rodney Hetzel on 01/22/2016

When selling a property without placing it into MLS will get her and her broker a fine, MLS read their rules, they have the ability to set a fine for not listing a property!!!


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The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

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