Friday, December 16, 2005

The Role of the Real Estate Agent

In yesterday's Seattle Post-Intelligencer (one of the two daily papers here in town), there was an interesting article on discount real estate brokerages. Discount brokers list a property on the Multiple Listing Service (the database of properties for sale maintained by real estate brokers, who in turn employ real estate agents) for a low, flat fee. The lower the fee, the fewer the services associated with the listing. As discussed in the article, there are several discount brokers in the marketplace.

I found the article particularly interesting, however, for a slightly different reason. In assessing the "changing paradigm," the article discusses the services typically provided by a real estate agent. The article quotes a local attorney, Matt Davis, at length. Mr. Davis works with the Demco Law Firm, which represents "some of the largest real estate brokerages in Washington," according to the Demco web page. They "provide on-call counseling and consultation to [the firm's] broker clients on all aspects of their business." Given that brokers are an important Demco client, it is not surprising that Mr. Davis emphasizes the services that can be provided by real estate agents (thus encouraging consumers to utilize them).

Regardless, Mr. Davis is certainly correct, to a certain extent: real estate agents provide valuable services to their clients. However, he takes the point a little too far. It is established law here in Washington that real estate agents can engage in the very limited practice of law by completing blanks in preprinted legal forms that were drafted by lawyers. Cultum v. Heritage House Realtors, 103 Wn.2d 623 (1985). Agents may not provide legal counsel or services beyond this narrow scope. The rationale is simple: agents lack the professional knowledge and skills expected of a practicing attorney.

There is certainly no definitive answer as to when a real estate agent crosses the line and engages in the practice of law. Mr. Davis indicates that an agent can protect a client's interests by understanding the pitfalls in a boilerplate contract and insuring that the contract is enforceable. Perhaps, but that sounds a lot like the practice of law, as the agent is interpreting the contract and taking steps necessary to render it enforceable. Mr. Davis further suggests that an agent is an appropriate "steward of the transaction," particularly where the transaction has soured and turned into a "war zone." This goes too far. If the transaction has soured, there is an actual legal dispute between the parties. Any guidance offered by an agent under these circumstances must, by definition, extend beyond the filling in of blanks in a preprinted contract. Accordingly, a buyer or seller should not look to an agent for guidance under these circumstances. Rather, an attorney should be consulted. Notably, by law an agent must persuade the client to consult with an attorney if the transaction possibly involves complicated legal issues. Cultum, cited above; RCW 18.86.040(c) and RCW 18.86.050(c), requiring an angent to advise the client to seek "expert advice" on matters "beyond the agent's expertise."

A real estate agent can and should work with the client in regards to valuation, marketing, and details associated with a transaction. However, if there is a legal issue, the client is better served by consulting with an attorney.

That said, and like Mr. Davis, I have an interest in this debate, as I represent buyers and sellers in residential real estate transactions. Furthermore, to be fair to Mr. Davis, I will alert him to this post so that he has an opportunity to respond.

3 Comments:

At 5:20 AM, Blogger krishna kashyap av said...

All the responsibilities are
really well explained..
And i hope every real estate agent
follows these thoughts..
Idaho Real Estate

 
At 8:53 PM, Blogger my real estate blog said...

Thanks for sharing that information about what real estate agent’s role is. Real estate agent will help us see what the best course of action is for our property.
Pia | lot for sale in Philippines

 
At 2:49 AM, Blogger sapna said...

This comment has been removed by the author.

 

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