BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
In certain geographical locations, the real estate market has softened and listing agents are now holding more homes open in an effort to market and sell the properties. Agents who have multiple listings are challenged by ensuring that multiple homes can be held open in a single day or weekend. Some agents are relying upon unlicensed assistants or other people to hold the homes open. Some agents are utilizing licensees from other brokerages. There are significant risks to allowing an agent who is unlicensed or not licensed with your brokerage to hold a home open.
QUESTION NO. 1: I am a listing agent with multiple houses being held open each weekend. I sometimes use my unlicensed son to hold a home open. What is the risk?
ANSWER: The California Department of Real Estate (“DRE”) discourages non-licensees from holding homes open. While technically the action of opening a home and allowing buyers to access the home does not require a real estate license, the moment a question is asked by a potential buyer about the property to the host (person handling the open house,) there may be a violation of DRE regulations. A California real estate license is required when a person, in exchange for compensation, handles any aspect of negotiations, including relating to disclosures or contracts for the purchase or sale of real property. If the host is not compensated, arguably, a real estate license is not required. However, there is liability associated with a non-licensee holding a home open. Such liability can arise from the following: potentially inaccurate answers being given by the host; the host not recognizing an issue when answering questions; the host receiving information about the property which the host does not accurately transmit to the listing agent to be disclosed (i.e., a neighbor’s disclosure); or other deficiencies affiliated with not being a professional.
QUESTION NO. 2: When I have multiple homes being held open in a single weekend, I will ask colleagues at other brokerages to help me. Is that a problem?
ANSWER: Yes. Please see the attached tip BRM previously issued regarding risks associated with a licensee affiliated with a different broker holding a home open.
SOLUTION: One solution to this issue may be entering a co-listing agreement with an agent from a different brokerage for the limited purpose of holding a home open. This arrangement will satisfy DRE regulations. It will also likely meet the requirements of your and the other brokerages’ errors and omissions insurance policy. Attached is a co-listing agreement form which can be used for this limited purpose. Agents should decide how much compensation the co-listing agent will receive. Agents should note that both brokers of both agents should execute the co-listing agreement.
PRACTICE TIPS:
- It is strongly recommended that agents should not use non-licensees to hold homes open.
- Without a co-listing agreement, agents should not ask agents from other brokerages to hold their homes open.
- When the co-listing agreement is used, sellers and both brokers should sign the co-listing agreement, acknowledging their awareness that a different brokerage will hold the home open.
Attachment to 250425 – Co-Listing Agreement for Open Houses 4-25-25
Attachment to 250425 – 230324 Risks of Holding a Home Open for Another Broker’s Listing