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Advice for New Agents | The Other "L" Word in Real Estate: LEGAL

By
Industry Observer with RETIRED / State License is Inactive Inactive License Oregon

Advice for New Agents | The Other "L" Word in Real Estate: LEGAL

We all know the real estate mantra of:

Location, Location, Location

But, there is another "L" word that is even more important for new agents to grasp:

Legal, Legal, Legal

Everything -- E-V-E-R-Y-T-H-I-N-G -- in real estate is defined by one, simple "L" word: LEGAL

Everything is legal binding . . . including "Location."  The "Where Is" clause comes to mind.

Terms and conditions are nothing more than:  legal terms and legal conditions of the purchase and sale.

The "law" of agency relationship - the 'whom represents whom' is based on the common law of real estate agency relationship.  FIDUCIARY DUTIES are paramount, and . . . legal!  Can we can "breach of fiduciary duties?"

Everything about real estate is a legal concept. 

  • The transfer of title, the offer of sale
  • The listing agreements
  • The purchase agreements

. . . all are legal documents and while "location" may be the emphasis of buying or selling a property, the legal ramifications are throughout the entire process, whether buying or selling.

The listing agreement is a contract which is legal and binding.  My advice to new agents:  READ IT!

The purchase agreement is a contract whichis legal and binding.  My advice to new agents:  READ IT!

The deed, the loan documents, the addenda . . . yup, all legal and all binding.  My advice to new agents:  READ IT!

While real estate agents are not licensed to practice law, we are licensed to complete real estate documents, understand real estate law, and represent our clients.  This representation is a LEGAL concept as well.  We are licensed as real estate agents . . . License law dictates!  

 

------------>My advice to new agents: READ your states statutes on real estate agency license law!  

 

There are rules and regulations in your MLS membership.  READ THEM!

There are Zoning laws.  KNOW WHAT THEY ARE!

There are State Statutes to licensing.  READ THEM!

There are contracts (listing agreements, buyer representation, etc.)  READ THEM!

There are Codes of Ethics as a Realtor®.  READ THEM!

 

Further reading:

What's In Your Contract?

Contract Law 010 . . . err . . . I Mean 101

Zoning Laws . . . The Hidden Governing Factor

Portland Real Estate Questions:  What is Earnest Money?

Portland Real Estate Questions:  What is an Escrow Hold-Back?

Courtesy, Common Partice and Contractual -- KNOW the Difference!!

Posted by

 

 

Carla Muss-Jacobs has RETIRED effective May 1, 2018

Representing Buyers in the Portland Metro Real Estate Market | Clackamas Multnomah and Washington Counties | Since 1999

Carla Muss-Jacobs, REALTOR®, ABR, CEBA, ePro
Principal Broker/Owner ~~ INACTIVE

Carla Muss-Jacobs' retirement became effective May 1, 2018

Direct: 503-810-7192 

 

All Rights Reserved © 

Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

Preaching to the choir! It has to be done correctly and in writing. 

Oct 14, 2015 11:25 AM
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Carla, you can never be to careful in the society we live in. Everyone wants to sue everyone else. Great post to new agents!

Oct 14, 2015 11:26 AM
Carla Muss-Jacobs, RETIRED

Not so much about "suing" others . . . the point being that as the representative of our clients in a real estate transaction, we had better know what our documents contain and what it all means -- even Newbies!!  

Oct 15, 2015 03:32 AM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Carla, this is such an important point.  And so many new agents are focused only on getting leads without knowing what to do with one when it does show up.  

Oct 14, 2015 11:41 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Hi, Carla. 

      An instructor at our Board was going over the new Contracts and Forms recently.   Someone in the class brought up the term,  "Unauthorized Practice of Law". 
     The Instructor said, "Okay, technically that is correct... but don't kid yourselves, fellow Agents... we 'practice law' all day every day.  You had better know what these forms say and what these forms mean!"

Oct 14, 2015 12:01 PM
Carla Muss-Jacobs, RETIRED

We are licensed to represent clients in a Fiduciary position.  While we can not give legal advice and we can not prepare legal documents we still are responsible for our represenations, that's for sure!!  Thanks for the comment.

Oct 15, 2015 03:33 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Carla- this one cannot be said enough.  You are not just responsible for showing houses!  You have to know your contracts and what legal ramifications there are.  

Oct 14, 2015 12:23 PM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Not only read their contracts, but to verify what other professionals might be telling them is true, because they may be wrong. I agree, we have a responsibility for our clients.

Oct 14, 2015 01:09 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

And all this, Carla, without ever looking like we are practicing law, which of course, is a big "no-no." But knowing whats in contracts and being able to explain that in plain language to clients is critical--without it, it's too easy to lose one's credibility and get into some really hot legal waters.

Oct 14, 2015 04:19 PM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Some of the common mistakes the newbie do is sign on behalve of buyers/sellers. It is not improper but illegal.

Sam Shueh

Oct 14, 2015 08:22 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Congratulations on the feature....too often that shiny new license has the "L" word Lucky attached...ahhh the key to instant riches and legal "L" forgotten !

Oct 14, 2015 08:54 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Carla. A well  deserved feature. You share wonderful words of wisdom and hopefully your words are take to heart.

Oct 14, 2015 09:14 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

One of the many tools Carla Muss-Jacobs, Principal Broker/Owner has in her little toolbox...Now, we do too

Oct 14, 2015 11:40 PM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Carla Muss-Jacobs, Principal Broker/Owner Good advice for both new and seasoned agents. We need to understand the blanks we are filling in on an agreement.

Oct 14, 2015 11:50 PM
Carla Muss-Jacobs, RETIRED

Thanks correct.  We can explain things and what it means to our clients.  I have a real estate lawyer for the heavy lifting!  LOL  Michael Setunsky 

Oct 15, 2015 03:36 AM
Margaret Goss
@Properties - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

Remember our real estate training to get into the business.  It was almost all law. Sadly, most of it wasn't relevant - your points are.

Oct 15, 2015 01:07 AM
Carla Muss-Jacobs, RETIRED

Thanks Margaret Goss 

Oct 15, 2015 03:36 AM
Nicole Doty - Gilbert Real Estate Expert
Zion Realty - Gilbert, AZ
Broker/Owner of Zion Realty ZionRealtyAZ.com

That's exactly why I comb through every page of every contract any of my agents turns in to me and if I find anything questionable I explain to them why it's wrong and what needs to be done to correct it. There is no room for grey areas when it comes to legally binding contracts. 

Oct 15, 2015 01:50 AM
Carla Muss-Jacobs, RETIRED

Great comment and you do your agents justice!! I'm sure they learn a thing, or two . . . or three . . . from you!!  Nicole Doty - Gilbert Real Estate Expert 

Oct 15, 2015 03:38 AM
Nick T Pappas
Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Carla, great advice for the newbies and those who've been around for a while. It seems that I come across long time agents who don't feel the necessity to complete a contract properly and let their egos get in the way.

Oct 15, 2015 04:25 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Carla, Far too many real estate agents do not understand the contracts, or agency, or … okay … don’t get me started.  Heck I do not profess to know everything. I am always learning new things in this business … as it should be … right?

Oct 15, 2015 04:30 AM
Vera Gonzalez
RE/MAX Suburban, Inc. - Sterling Heights, MI
Gonzo For Real Estate

Carla Muss-Jacobs, Principal Broker/Owner ,

 

Congrats on well deserved feature. Legal should be top of minset. Always practice License protectus

Oct 16, 2015 01:01 AM
Praful Thakkar
LAER Realty Partners - Burlington, MA
Metro Boston Homes For Sale

Carla Muss-Jacobs, Principal Broker/Owner well said!

Everything should be in writing and everything should be done 'Legally'! And that's one 'L'esson they should never forget!

(And we stop at the first 'L' word - and teach them 'Location Location Location'!)

Oct 16, 2015 03:38 PM
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Great advice Carla Muss-Jacobs, Principal Broker/Owner! Even the gifts and cards we mail out/give should be well thought out and planned not to offend anyone and not against "Fair Housing Laws".

Oct 19, 2015 03:44 AM
Barb Szabo, CRS
RE/MAX Above & Beyond - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Great article Carla. After almost thirty years in the business, I still read and re-read the legal documents!

Oct 21, 2015 03:15 AM