By Gary Isom
Arkansas Real Estate Commission
The closing is over and the buyers just walked into their new house with excitement and anticipation. Then to their surprise, they discover that special item they thought was included in the sale is missing.
With technological advancements changing the way real estate is marketed, buyers to a transaction have often seen and reviewed much more information about a property than in years past. Maybe they saw an advertisement for the property or a copy of the MLS sheet. Whatever the source of information, the Arkansas Real Estate Commission is seeing more complaints filed about what was or wasn’t supposed to be included in the sale.
The investigative interview occasionally goes something like this. The buyer complainants say their agent told them that if the multiple listing service or an advertisement stated that a particular item was included in the sale, it must be included regardless of whether it’s stated in the sales contract. Consequently, when the complainant doesn’t get that specific item stated in the multiple listing service or advertisement, the complainant holds the listing agent and seller totally responsible, contending that their agent did nothing wrong by telling them the information did not need to be included in the sales contract or the addenda attached thereto. Remember, many sales contracts state something to the effect that the sales contract contains the entire understanding and agreement between Buyer and Seller.
It’s a common occurrence with complaints filed with the Real Estate Commission for the complaining party to fault the agent on the opposite side of the transaction as opposed to their own agent, whose responsibility it is to protect the complainant’s interest as they would their own. Parties to a transaction often know their agent well and don’t want to get them in trouble. It’s much easier to hold the other agent accountable. This still seems especially true with buyers. Buyers and many agents who represent buyers just have not made the leap over to accepting that an agent representing the buyer has the same level of commitment to the buyer as the listing agent does to their seller.
When regulation 10.10(a) states that “… a licensee, for the protection of the public and of all parties with whom the licensee deals, shall see that the exact agreement of the parties regarding real estate is in writing” it is generally referring to the sales contract and the addenda attached thereto. Whether the content of the multiple list service or any advertising is binding upon the parties or agents who supplied the information is for the courts to decide. However, if an agent to a transaction knows that their buyer client wants a specific item included as part of the sale, that agent and the buyers themselves should make sure that information is included in the sales contract or the addenda attached thereto so that it is documented that both parties agreed to it.
Especially in a market as we have now in which sellers are accepting less than listing price and buyers are requiring the sellers to make substantial concessions at the closing table, it’s not uncommon for the sellers to change their mind about leaving items they originally intended to let go with the property. When the buyer finds out after closing that the sellers took that coveted item with them, they are often going to file a complaint.
From the commission’s perspective, the buyer would have a stronger case against their own the agent because the buyer’s agent has the higher degree of responsibility to the buyer as a client than does the listing agent when the buyer is only a customer to the listing agent. Of course, when dual agency occurs where both sides of the transaction are in the same firm, both agents have a fiduciary obligation to both parties. In this situation, the Principal Broker and both agents licensed under him or her must look out for both party’s interest in somewhat of a limited capacity with regard to confidential information. However, items that do or do not convey with the property would not usually be considered confidential information so both agents and their Principal Broker would have an obligation to see that all agreements are reduced to writing.
Avoid disappoint or a complaint by writing it down and getting all parties to agree to it. Don’t depend upon separate advertising or listing information to be binding upon the parties to the transaction.
House to House is distributed weekly by the Arkansas Realtors® Association.