We have all heard the phrase: “We need to raise the bar”. Next, we see the attempts at raising that bar. In reality, I think we may have lost sight of the bar all together.

Over the past few years, it seems that there is a philosophy that anything can be fixed with a new Law, a new Rule or a new Policy. In my opinion, some of these changes have done more harm than good. Relax, I am not taking shots at the Regulator. I think it all boils down to the licensee that has distanced themselves to far from the basics. As a result, liabilities have increased.

Here are just a few of the problem areas I see out there:

1. Presentation of offers. It wouldn’t surprise me if 75 or 80% of the offers are being presented by the listing agent. Some of the listing agents blatantly deny a buyer’s broker from presenting the offer. Then we have buyer’s agents that simply fax the offer to the listing agent and wait for the result. Think about that. How can a listing agent respond to any questions the seller has about the offer or the buyer? The listing agent has never met the buyer and all they see are the terms of the offer. At times, the listing agent attempts to answer some of the seller’s questions and the result is a misrepresentation. Then we have the listing agent who avoids the presentation all together. These work disciplines import liability. The same holds true for the Counter-Offer as well.

2. Transaction buddies. The demand or strong emphasis by an agent to use specific escrow companies and in some cases specific escrow officers is a dangerous trend. The demands continue on using specific home inspectors over others, termite inspectors, lenders and the list goes on. Please look into the concept of negligent referrals before continuing that practice.

3. Writing the contract. Why is it agents are writing things into a contract that are already there? At times when you write something into a contract that is already there, you create either a point of ambiguity or negate a significant benefit of the preprinted contract. A classic example is the issue of the termite inspection. Some agents are inserting into the contract that the seller will pay up to 1% of the purchase price for treatment of termites or the repair of damages caused by termites. I submit that may eliminate a buyer’s right to reject the property if there is an adverse history of termites.

So what do we need to do? First, place greater demands on instructors that are teaching some of this stuff. Second, accept change and prepare yourself for this very complex business. Brokers and managers need to embrace the idea that an independent contractor agreement is not a declaration of independence!

It’s time to raise the awareness of duties to the client, and that will help us raise the bar more than any new law or regulation.

Published: August 13, 2001

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"Cec" Daniels, GRI is one of the nation's leading authorities and speakers on risk management, brokerage management, agency and real estate contracts. He has authored and maintains all the curriculum for the Arizona REALTOR Institute GRI Program on Agency and Contract Law. His expertise is supported with over thirty years of experience, and in 1996 was named Educator of the Year by the National Association of REALTORS®. Cec lives in Peoria, Arizona and invites you to email him at Cec@CecDaniels.com.