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How Far Do You Go In Advising Your Client?

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Real Estate Agent with Franklin Homes Realty LLC (615) 495-0752 or www.FranklinHomesRealty.com TN License #326261

How Far Do You Go In Advising Your Clients?

How far do you go in advising your clients?I read a very interesting Featured post earlier today written by John Meussner titled, "When Should A Borrower Pay Points". In his post John says, (and I'm paraphrasing) that on numerous occasions, Realtors and financial advisers may offer financial advice even when they don't understand all the concepts.

I absolutely agree with John, but many of the comments seemed to suggest that agents were anxious to get the information regarding when borrowers should pay points so they could share it (and advise) their clients. 

Hmmm. I'm not sure what to think regarding giving advice to clients.

In Tennessee both buyers and sellers sign a Disclaimer Notice that says:

"Brokers and their affiliated licensees...are engaged in bringing together buyers and sellers in real estate transactions. Licensees expressly deny any expertise with respect to advice or informed opinions with regards to any of the following matters."

What follows are 2 1/2 pages of things we should not advise our client on. In fact, at the very end of this list, the form reiterates that both buyer and seller acknowledge that they "...have not relied upon the advice, casual comments, or verbal representations of any real estate licensee relative to any of the listed items or similar matters."

In other words, other than the bringing together of the buyers and sellers, we should be very careful about offering advice to our clients.

We rely upon a long list of professionals in many different disciplines in moving our clients toward the closing of the transaction. Qualified professional mortgage lenders discuss our client's credit score with our clients, not us. Those same professionals advise our clients on the best financing instrument to consider given their situation. We do not get involved in that discussion either.

We recommend our clients seek out other professionals for home inspections, roofing issues, environmental hazards and the list goes on and on...

I'm curious, how far do you go in advising your clients?

Posted by

TW Realty Group
 
Tom White, REALTOR®
Franklin Homes Realty LLC
(615) 870-8169
 

 

 
 
This posting with the content written here and photographs displayed are the intellectual property and opinions of Tom White of Franklin Homes Realty LLC. Any party who uses this material without the written permission of Tom White is subject to copyright infringement and possible lawsuit.

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Tanya Van Blake-Coleman
Van Blake-Coleman Realty, St. Thomas/www.talk-to-Tanya.com - St Thomas, VI
Improving the Quality of Your Life

Tom I think it's human nature to give advice. Especially given the nature of this business and the repetitive nature of transactions we see throughout the year, and year after year. Of course it is up to the seller or buyer to take the advice or not. I have watched as buyers would go to certain institutions to get lending when I know that particular place will make things more difficult unnecessarily. I can let them know that some of my former clients have had a hard time with this particular business or ones similar to it. There have been many times when they went ahead and dealt with them despite my advice. That's their decision and prerogative. It happens. Ultimately we all do more than simply play matchmaker to buyers and sellers even though that lies at the crux of what we do. Good luck!

Nov 07, 2014 07:32 AM
Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

      It is one thing to provide information to a customer or client; it is something else when you say, "You SHOULD do this or that".   Be careful not to present yourself as a financial advisor... or engage in the unauthorized practice of law.

Nov 07, 2014 09:05 AM
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Tom - I have no hesitancy in advising my clients about things I know. That said, I know very little - like what the market will do, how much the home will appreciate, what's going to happen to that empty lot behind the house. It's easy to say I don't know but I'll try to find out.

Nov 07, 2014 09:20 AM
Christopher Pagli
William Raveis Legends Realty Group - Tarrytown, NY
"I Stay Open Until You Close"

I believe we should leave anything beyond the scope of our duties to the professionals.  In NY we have to be careful how much we eevn talk about mortgage products etc because we can violate laws.

 

 

Nov 07, 2014 10:13 AM
Winston Heverly
Winston Realty, Inc. - Atlantis, FL
GRI, ABR, SFR, CDPE, CIAS, PA

Tom,  what a wonderful bit of information with a great message of useful tips to learn by.

Nov 07, 2014 12:10 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Tom. It is important to have a large list of referral partners, so that your clients have the best possible services available to them.

Make it a great weekend!

Nov 07, 2014 06:00 PM
TeamCHI - Complete Home Inspections, Inc.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029

 Good morning Tom. I think it is important to have a huge list of referral partners. I do my best to refer companies that can provide services for my clients at a reasonable price.

Nov 07, 2014 06:38 PM
Amanda S. Davidson
Amanda Davidson Real Estate Group Brokered By eXp Realty - Alexandria, VA
Alexandria Virginia Homes For Sale

Tom, we have to be very careful in what we say. Anytime it's outside the scope of real estate I suggest they talk to a professional (i.e. taxes, legal advice, etc). I've seen agents get themselves into hot water for going too far with advice they aren't qualified to give.

Nov 07, 2014 10:39 PM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Regulations vary from state to state. Professionals need to keep their advice within their scope of expertise.

Nov 08, 2014 05:03 AM
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Tom, this is an excellent post. I do not do much advising, but provide as much information as I can to my clients. I always let them know that it is their decision, not mine.

With that said, I oftentimes hear other agents say they told their client to do this, and suggested that their client do that. To me, they are walking a very thin line.

Nov 08, 2014 05:19 AM
Tom White
Franklin Homes Realty LLC (615) 495-0752 or www.FranklinHomesRealty.com - Franklin, TN
Franklin Homes Realty LLC, Franklin TN

Tanya--I hear what you're saying. My point was that we do take a significant risk when we offer advice on matters outside our expertise.

Fred--I think we all agree we need to stay from legal matters. We may get into trouble when we start interpreting information in order to give advice on less obvious issues.

Dick--Something tells me you know a great deal!

Christopher--I totally agree, and I do recognize that states have different regulations.

Winston--Thanks for stopping by.

Joe--We do, and that list is growing as we come across environmental issues that we haven't run into before.

Michael--Your firm is a good example of specialization!

Amanda--That's exactly the point of this post, and tax issues are a very good example.

Roy--You are right, I can only speak to Tennessee Real Estate.

Troy--It can become a very thin line even if one is confident of their information.

 

Nov 08, 2014 06:24 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Tom, This is yet another example of how real estate is local.  The contracts and laws are too. How far to do I go in advising my clients?  As far as my knowledge and license allows me to go. The license prevails. That means no tax or legal advice. The rest is referred out to professionals with a license … whatever area that may be.

Nov 10, 2014 12:03 AM
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