BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Buyer Agent Contact with Seller
Q: I am a buyer’s agent and my buyers want me to show them a property which is on the MLS. However, there is no lock box and the MLS states: “Contact listing agent for showings.” The listing agent is not returning my calls, and I suspect that she is trying to sell to her own buyer. It has been two days and I am frustrated because my buyers really want this property. Is there anything I can do?
A: Possibly. First, you need to be aware of the Code of Ethics which requires you to deal with the listing agent:
All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client. (Standard of Practice 16-13)
But, there is an exception in the Model MLS Rules which have been adopted by most local MLS’s. If the property has been placed in the MLS then, if adopted by your MLS, Rule 9.1 applies:
“9.1 Showings and Negotiations. Appointments for showings and negotiations with the seller for the purchase of listed property filed with the service shall be conducted through the listing broker except under the following circumstances:
(a) the listing broker gives the cooperating broker specific authority to show and/or negotiate directly with the seller, or
(b) after reasonable effort and no less than 1 day after the cooperating broker cannot contact the listing broker or his representative. However, the listing broker, at his option, may preclude such direct negotiations by the cooperating broker by giving notice to all Participants through the MLS.
In the event all showings and negotiations will be conducted solely by the seller, the listing broker shall clearly set forth such fact in the listing information published by the service.” (emphasis added)
So, if you have made reasonable efforts to contact the listing agent, and that agent’s broker, and have not received a reply, then this rule would allow you to present your offer directly to the seller.
PRACTICE TIPS:
1. To contact a seller who is a client of a different brokerage who has an exclusive listing is going to result in an upset listing agent, so only engage in this practice as a last resort – and with the approval of your manager or broker.
2. Document all of your efforts to contact that listing agent and that agent’s broker or manager. Make several attempts to make contact to show that you have made “reasonable” attempts. Ask your manager or broker to attempt to contact the listing agent’s manager or broker as well to try to resolve the issue. It is a good idea to put something in writing to them such as an e-mail.
3. Check your local MLS rules to see if the above Model MLS rule, or similar, has been adopted by your MLS. Also, make sure that the listing agent in the MLS did not prohibit contact with the seller, in which case the above MLS rule would prohibit your contacting the seller.
4. If you have done all of the above and are ready to contact the seller, be sure to identify yourself and your brokerage, and the reason for your call. If the seller is cooperative, arrange for a showing. If the seller directs you back to the listing agent, you might point out your frustration in contacting that agent – but do not disparage that agent in any way apart from mentioning the lack of return communications. If the seller insists, respect seller’s wishes.
5. Follow up with an e-mail or phone message to the listing agent and their broker or manager regarding the meeting with the seller and the results of that meeting.
6. If thereafter the seller continues to communicate directly with you then, per the Code of Ethics above, because the client has initiated the communication, you then can ethically continue to communicate with the seller. Remember, buyers and sellers are the principals and, as such, can choose the method of communication that they want – including direct contact with the other party or their agent, thus by-passing their own agent.
7. However, before doing so:
A. First check with your company for any policy direction on this course of conduct. Some company’s policy may prohibit this practice.
B. Advise the seller that you prefer that he/she communicate through his/her agent. If the seller wants to bypass his/her agent and talk directly to you, ask the seller to please make that request in writing, such as an e-mail. At a minimum, document this conversation in your transaction log if seller does/will not send an e-mail confirmation. Thereafter, it is not unethical to continue communications and negotiations directly with seller.
DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.