Don’t Make The Mistake Of Practicing Outside The Scope Of Your Agency Relationship And Expertise
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It is hard enough to be a great real estate agent in today’s volatile California real estate climate, but to top it off, so many clients expect their agents to practice outside the scope or capacity of their relationship. I agree that knowledge is power, but you should not take on the role of attorney, CPA, Contractor, Engineer, Surveyor, or any other licensed professional that is beyond the scope of your agency relationship.
As an Attorney, Licensed Broker, and In House Counsel for a prominent Southern CA Brokerage, I definitely understand the pressure and expectations that clients put on their agent, but think before you speak.
Especially when processing a short sale, you need to be exceptionally prudent, and never practice outside the scope of your agency relationship with you Principal. In addition to thinking before you speak, always utilize the most current and updated versions on the C.A.R. Form SSA: Short Sale Addendum, and the C.A.R. Form SSIA: Short Sale Information and Advisory. Both forms have very specific language regarding Professional Advice. Always review these documents at length with your client, so they understand the importance of seeking professional counsel, and understand the scope of your relationship with them.
It is a great idea to review the, Code of Ethics and Standards of Practice of the National Association of REALTORS®, and especially the following Articles so you can key into your specific duties and obligations as a real estate professional in the state of California.
Code of Ethics and Standards of Practice is a great resource, but I have included some specifics and pertinent Articles and Sections for your review:
Article2: REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law. (Amended 1/00)
Article9: REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing. (Amended 1/04)
Standard of Practice 9-1: For the protection of all parties, REALTORS® shall use reasonable care to ensure that documents pertaining to the purchase, sale, or lease of real estate are kept current through the use of written extensions or amendments. (Amended 1/93)
Standard of Practice 9-2: When assisting or enabling a client or customer in establishing a contractual relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of the contractual relationship being established prior to it being agreed to by a contracting party. (Adopted 1/07)
Article11: The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.
REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth. (Amended 1/95)
Always remember these Codes when you take on any new client, but especially when the situation deals with the complexities and emotions of a short sale positioned property. Often times many client questions can be addressed in a one hour consult with our office.
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