Special offer

As if I needed another reason.

By
Real Estate Agent with Jameson Sotheby's International Realty

Ocassionally, I've read online, where an agent has been contacted by a buyer, or seller to simply handle the paperwork on a transaction for a flat fee.

The buyer and seller have already found each other, and they simply want a Realtor to handle the paperwork.  Sometimes they offer a small percentage, or often a flat-fee for the services.

While that sort of thing is not really my cup of tea, I haven't really had much of a problem with it, for those who choose to handle that sort of paperwork.   In my region we use real-estate attorneys who charge a minimal fee for those kind of services and I usually recommend that.

But in the most recent Realtor® magazine, the subject was raised about "practicing law without a license", and an agent who was sued (and lost) for modifying a few paragraphs in their standard contract. 

Among the things they recommended to protect yourself from such a liability was "never charge a fee for handling any contracts"...  makes perfect sense... because then you could be considered practicing law without a license.

Yeef! Just another reason to refer them to a local real estate attorney

Posted by

 ALAN MAY, Realtor®   
Specializing in Evanston Real Estate and North Shore Real Estate

Jameson Sotheby's International Realty, 2934 Central Street, Evanston, IL 60201
Office: 847.869.7300      Cell: 847.924.3313      Email: Almay@aol.com

Evanston Real Estate & North Shore Real Estate
Licensed in Illinois

   

Comments(15)

Francine Viola
Coldwell Banker Evergreen Olympic Realty, Olympia WA - Olympia, WA
REALTOR®, In Tune with your Real Estate Needs

I am in agreement with you on this one. Even if it doesn't end up as a court case, it's a slippery slope.  

Oct 30, 2018 06:08 PM
Alan May

We have a pretty strong legal lobby in the Chicago area... I'd hate to tangle with them. :-(

Oct 30, 2018 06:18 PM
Anthony Acosta - ALLATLANTAcondos.com
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

Good day 

Thank you for sharing your information with us 

Have a great day.

10/30/2018. 

Oct 30, 2018 06:19 PM
Alan May

Thanks for the drive-by.

Oct 31, 2018 05:33 AM
Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

Alan May Clents and agents that work this way clearly do not understand the agency relationship. It is hard to imagine any agent risking their license for a few bucks without performing the duties required by an agent.

Oct 30, 2018 07:07 PM
Alan May

I think they're presuming that there is no agency relationship... and you could even asure that, by having both clients sign a form of "no agency"... but that still doesn't release us from the liability of "practicing law without a license".

Oct 31, 2018 05:35 AM
Leif Price
Chirpy Home - Portland, OR
Blogger at Chirpy Home

It is really better to consider reading the lines of the contract so as to avoid these acts of some agents. Such risk they are taking when they do this. Licenses are hard to earn and yet, these people just do it for some dollars to add to their pockets.

Oct 30, 2018 07:59 PM
Alan May

I think most licensees, got their licnese in order to add to their pockets.

Oct 31, 2018 05:37 AM
James Dray
Fathom Realty - Bentonville, AR

Morning Alan.

Can't speak to anyone else, but changing anything in our contracts, won't get pass me

Oct 31, 2018 02:05 AM
Alan May

I have no issue with crossing stuff out, nor filling in blanks....

Oct 31, 2018 05:37 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

While the handling of this kind of activities can vary state to state, I think your advice is sound for your area, Alan.

Oct 31, 2018 03:39 AM
Alan May

Love your new photo.

Oct 31, 2018 05:38 AM
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Alan. I am with you. The first and best thing I learned in RE school was seek competent advice.

Oct 31, 2018 07:54 AM
Alan May

Which, in and of itself, is excellent advice.

Oct 31, 2018 08:56 AM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

We fill in the blanks.  We don't modify the contract.  Seems pretty easy to do.

Oct 31, 2018 06:26 PM
Alan May

You'd think so, wouldn't you?

Nov 01, 2018 10:02 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Alan- while not an agent, it seems to me that the prudent thing to do would be do no modification at all. 

Oct 31, 2018 07:16 PM
Alan May

Sometimes, Kathy, the transaction calls for a modification.  But we're taught, pretty clearly, in our licensing classes, not to author any modifictions.

Nov 01, 2018 10:03 AM
John Henry, Florida Architect
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

I am surprised that this was an issue in the real estate world.  There are similar problems in engineers or architects signing or sealing documents prepared by others which is a total no- no.

Nov 01, 2018 04:26 AM
Alan May

It's a surprisingly large issue with real estate agents.

Nov 01, 2018 10:03 AM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

That is a bit frightening. I don't do flat fee for contracts but in Oklahoma attorneys are not involved at this level. 

Nov 01, 2018 10:22 AM
Alan May

In northern illinois we use attorneys for 99.9% of all our transaction.  But they tend to charge a flat fee for the transaction ... generally around $400-$800 in total.  Fully worth it.

Nov 01, 2018 10:38 AM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

That isn't really a common practice here.  Lawyers aren't involved unless there is a problem with cancellation and earnest money return

Nov 01, 2018 01:21 PM
Alan May

here we use attorneys all the time.

Nov 01, 2018 02:54 PM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

A small fee sure isn't worth your license. I saw the NAR video on that topic and it said that it was illegal to fill out the forms unless you were handling the transaction. Unfortunately I don't remember if it was illegal everywhere or just in some States.

The best recommendation, of course, was to learn your own State's statutes.

John Henry's comment reminded me of the time my husband was hired to build a house and the County called for a stormwater plan before they'd issue the building permit. After I got some help and figured out how to draw the darn thing, I took it to an engineer, who signed his name for $125. He didn't even look at it. 

Nov 01, 2018 04:52 PM
Alan May

yeef!

Nov 01, 2018 05:34 PM
Suzanne Strickler
Realty Mark Associates - Havertown, PA
School is never out for the Successful.

In my humble opinion, I'd rather have them come to me for ALL the proper forms then run to Staples and buy whatever contracts they have to sell. It's legal here in PA to be a transaction licensee.

That agent who changed a paragraph or two crossed over the line and was no longer a non-agent which is what a transaction licensee really is. There's the rub.

Nov 05, 2018 07:43 AM
Alan May

This is not about simply supplying blank forms for them to fill out.  This is about filling out contracts for them, for a fee.

Nov 05, 2018 07:59 AM
Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Northwest Tennessee Realtor

I for you am not interested in letting either a buyer or seller use my services so cheaply.

Nov 13, 2018 12:01 PM
Alan May

I'm glad you're for me.

Nov 13, 2018 02:49 PM