Can a Referral Agent Conduct Open Houses?

Tom,

This is interesting. In Ontario you must be registered to conduct an Open House.

And sales reps and brokers have basiaclly the same rights and status.

Brian

I operate in an office which practices Designated Agency. In short two agents may separately represent a Buyer and Seller on the same property.  In the case of open houses, Massachusetts law requires that we disclose our relationship with the the principle. Once again if the agent hosting the Open House represents the seller its quite clear, "The agent holding the Open House is the Designated Agent of the Seller and represents the interests of seller in all manner of marketing and negotiations".

But when the Designated Seller's agent is not holding the open house, but another agent in the office,  we refer to this as a Non-Designated agent and would disclose something along the following

"The agent holding the Open House is NOT a Designated Agent of the Seller and therefore does not represent the Seller. The Agent may act as a Facilitator or may represent the interest of a buyer as a Designated Agent of the Buyer"

So I suppose it could be conceivably plausible to have a "referral" agent, from a different "brokerage" act as the non-designated agent. And when I think of "referral" agent I think of referral fees resulting from buyers not working with whom ultimately retain the referral agent???

I do believe a Un-licensed "hired hand" or "open house host" sitting in on behalf of the Designated Agent of the seller would not permitted by law.

A FSBO could have a friend or family member "house sit" even a licensed agent (although the agent would be required to disclose any agency relationship of course).

These comments are only my understanding of Mass. Agency law and may or maynot be correct.

Thanks for the eye-opening info. It answers the question I had been pondering for a few days.

Tom,

Your post and the comments remind me that real estate is local and laws and customs vary from state to state.

Your recommendation would be considered a safe position in CA to stay on the correct side of the law.

Here in Connecticut, an unlicensed assistant may NOT host an open house.
My question is why would an agent on referral status want to hold an open house?  By being on referral status, they cannot sell real estate, even though they are in fact licensed.  They do not have E&O coverage, they do not have MLS access, they are not a member of the Boards, and their referral contract with the broker states they cannot sell real estate.  So why sit an open house?

Interesting post, yet not sure having an unlicensed person is a good idea at an open house since they couldn't answer any questions about real estate.

Here, in Indiana, a person with their license in referral status cannot conduct open house.  You have to be licensed, and have your license in active status to perform any duties that fall under practicing real estate.  A person with their license in referral status can only send referrals.

There seems to be little reason, in my opinion, to have unlicensed staff in a property.  If you have an assistant, they should really be licensed.  You never know what role they may need to play.  We have 15 - 50 unit new development projects that require more than one salesperson to operate open houses at, but they are always licensed.  You don't want your staff to be in the position of telling a customer they can't answer even the most basic questions.  It makes everyone look bad.

If my firm was large enough we would pay the bucks to have all assistants lincensed, just to be safe.

Hi Tom,  I am not sure I see the problem as long as the referral agent remembers which broker owns the listing and represents themselves as such.

After reading this the only thing I could think was that I am glad I am not in Texas.  Thanks for the post and Merry Christmas.

I have used an unlicensed assistant to sit an open house.  (It was my mother)  Our office had more homes open for agent tour than we had agents.  She was there to make sure nothing happned to the house while it was open, and to hand out info sheets.  She was instructed to state that she was not an agent, and could make no representations about the house.  Sometimes we just need an honest, warm body to welcome guests to the home.  This was an agent open, so I don't think it would work as well with a public open.

I'm sure a few will bend the law a bit and get away with having somebody working for $10 an hour. Is it worth loosing your license over if caught for a violation? Why take the risk. besides what would happen if you found a hot prospect, chances are you loose them with the inability to sell.

Nevada is very restrictive in what any unlicensed individual can do.  An assistant can host an open house only if they do not tour/point out features, and only hand out prepared material prepared by or under the supervision of their licensed agent.  Yet any licensed agent can hold any house open provided the proper disclosures are made and it is with listing broker and seller approval.  Once upon a time, anyone could hold a HUD home open here, but they went away with insurance liability issues.

I always error on the safer side. I would make sure that they acted like unlicensed agents, but then is there a good reason to use them? People stop by open houses for information and to see the house, they often like to talk about features and the neighborhood. I find doing open houses myself, (bringing something to do in the down time) has actually gotten me several clients. Very interesting post, I'd never heard of "referral" agents before

I agree with Brian  #16 in Ontario open houses listed with real estate agents must be manned by licenced salespeople, except for the owner, of course.  However, that doesn't preclude an agent from one brokerage from holding an open house on a house listed by another brokerage provided that they have express consent by the listing broker and the homeowner.  I will often have an unlicenced friend with me on open house if the home is large, so that she can welcome people in and advise them that I am upstairs/downstairs with another customer, point out where the brochures are and the sign-in pages are.  She will never answer questions or give advice, and will simply say that I will be with them shortly.  If I refer a listing to an area within the GTA and ask the agent I referred it to if I can do an open house if they are too busy, I nearly always get a good response.  I also have contacts in many nearby boards, and have often been asked to hold an open house for them in a home in my area that, for one reason or another, they were unable to refer.  Many times, I end up with the referral anyway.