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REALTOR® Emeritus |  | KEEPING THE TRANSACTION ON TRACK | | ||
|  Keep the Transaction on Track Advanced Tip Advanced Tip Advanced Tip Broker Tip Getting to Close Advanced Tip Mortgage Basics Advanced Tip Advanced Tip Advanced Tip Inspections and Repairs Broker tip Closing Countdown Advanced Tip Going for the Close Advanced Tip Advanced Tip Advanced Tip Commission Disbursements Broker Tips Broker Tip Post-Closing Strategies Quiz: Contract to Close Bright Ideas: Contract to Close Code of Ethics: Contract to Close More Resources: Contract to Close | Staying Involved Without Alienating the Attorney Robert Bass, Robert N. Bass Ltd., an Phoenix-based attorney and educator whose law practice concentrates in defending real estate licensees in errors and omissions claims before the Arizona Real Estate Department, talks about working effectively with attorneys and avoiding disputes that can derail deals. Bass is an affiliate member of the Arizona Association of REALTORS® and is a past president of the Arizona Real Estate Educators Association. Q: What action should real estate practitioners avoid in working with the parties’ attorneys before closing? Bass: Most attorneys welcome the knowledge and insight of real estate practitioners, but salespeople must be careful not to undermine the attorney’s advice to the client. The lawyer’s job is to evaluate legal issues and analyze what will best protect their clients under the circumstances. And the practitioner should be receptive to the attorney’s analysis of risk. At the same time, a lawyer shouldn’t be saying, “Well, gee, I don’t think you’re asking enough for this property.” It’s out of bounds. Q: When are some situations in which practitioners commonly cross into the territory of playing lawyer? Bass: When a defect is found in the property just before closing and the buyer wants to cancel, the salesperson may be tempted to say, “Oh, well, if you cancel, the seller can sue you.” The buyer may become intimidated and feel compelled to close without making any effort to remedy the defect. This could create a liability later if the defect is major and the buyer is stuck with the house. Q: What should a salesperson do in such an instance? Bass: Had the practitioner said, “I just don’t know what your legal rights are here. Let’s get you together with an experienced attorney right away,” the practitioner wouldn’t be under threat of lawsuit. One of the most valuable things you do as a salesperson or broker is help people identify where they need help and get them in the hands of the most qualified people. Q: What are the salesperson’s obligations in explaining contract terms to the parties? Bass: Take the time to go through the documents very thoroughly. Have buyers and sellers circle and initial important provisions that apply to their obligations. One of the most frequent complaints I hear is, “Well, yeah, I initialed every page and signed it at the end, but I didn’t understand all this complicated fine print.” Q: How far can a real estate practitioner go in explaining a contract without infringing on the practice of law? Bass: Make sure the client understands the contract provisions; explain the meaning without expressing on a opinion on how the client should respond. Also, advise the clients to talk to their attorney if they are uncertain about a provision. And if local custom permits, give the clients a copy of a blank standard contract form ahead of the sale so that they can review it and become comfortable with it. 3 Tips for Staying on the Right Side of the Law 1. Check with you state licensing commission, your company’s attorney, or local REALTORS® association to see what the limitations on explaining contracts are in your state—they do vary. 2. Avoid giving interpretations, advice, or explanation on a given matter. 3. Never discourage clients from consulting an attorney. Courtesy of Ralph Holmen, associate general counsel, NATIONALASSOCIATION OFREALTORS® Getting to Close > | Keep It Ethical Never try to offer advice outside the scope of your real estate license or engage in the unauthorized practice of law. Instead, recommend parties obtain legal counsel to protect their interests. Articles 2 and 13 |