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Thoughts on Disclosure Regarding Real Estate Agency Relationship
Realtors should present the disclosure regarding real estate agency relationship as soon as practical.
Most California Realtors ask a buyer to sign the Disclosure Regarding Real Estate Agency Relationship when the buyer signs a purchase offer, but my philosophy lies more in accordance with the intent of the disclosure and we get it signed before showing property. On page two of the disclosure, in compliance with California Civil Code 2079.13 (k) and (i), in the fine print that nobody reads, it states: The selling agent shall provide the disclosure form to the seller as soon as practicable prior to presenting the seller with an offer to purchase . . .
If we are showing homes to a buyer, that’s a good time to get it signed, before we walk out the door. It establishes disclosure, although it does not confirm agency relationships. Agency relationships are confirmed in the purchase offer itself. Yet, we have a property manager with a real estate license in Sacramento who disagrees and has refused to enter sales in MLS under the selling agent’s name. This agent prefers instead to enter all the names of all the agents who have ever signed a Disclosure Regarding Real Estate Agency Relationship with this buyer.
MetroList has not yet enforced its own rules on one of my recent sales that say a listing broker needs to enter correct information from the selling broker. MLS Rules 10.1: Final sales shall be defined as recorded transfer of property. Final sales with the correct cooperating broker information and the correct sales information shall be entered into the MLS by the listing broker within three (3) business days of the final closing date.
The purpose of a Disclosure Regarding Real Estate Agency Relationship is to inform sellers and buyers that agents work in various capacities. An agent can represent the seller, the buyer, or both parties, under dual agency. It’s a disclosure, not an agreement. On the Realtor’s side, presenting the agency to buyers determines whether a) they trust, and b) they read. Further, it states: Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form.
Real estate law is such that ten agents could show a buyer property, yet only one agent is the selling agent noted on page 10 of the California Residential Purchase Agreement. Still, for no particular reason that I can see, we have a rogue Realtor who has refused to record the sole selling agent into MLS. That’s his story and he’s sticking to it. He says more than one agent signed an agency disclosure so he’s reporting all of those agents as the selling agents to MLS, regardless of the selling broker’s instructions. This strikes me as an odd situation that MetroList clerks appear reluctant to fix.
While I’m on a roll, I have a beef with the way the Agency Disclosure appears in ZIPForms. I have asked the California Association of Realtors (CAR) to consider changing the first field in its listing package in ZIPForms, but no representative from CAR has responded. I can’t be the only California Realtor to have noticed that when the template for the RLA loads into ZIPForms, the first document, the Disclosure Regarding Real Estate Agency Relationship, has such a teeny tiny field that it’s emphatically too small to read the seller’s name. It’s not my 20 / 20 vision.
Just goes to show that the end user might not have been considered when the fields were designed. They ought to test these things in the field with real people who use it, real Realtors. The fields change from blue to green with black lettering, which is also not easy on the eyes. Even if they just switched the order of the documents and made the Seller Representation of More Than One Buyer or Seller the first to load, it would help; that name field font is much larger.
One typo in the seller’s name on the Disclosure Regarding Real Estate Agency Relationship carries throughout the listing paperwork. It’s a PITA, but that’s the life of a Sacramento Realtor. Don’t get me started on agents who argue about how many agency disclosures a seller is required to sign . . .
50 Shades of Grey and the Real Estate Purchase Contract
Our California residential purchase agreement is not an iron-clad purchase contract.
Sacramento real estate agents primarily use purchase contracts developed by C.A.R. as agreements to buy a home in Sacramento. It seems that with every new case law, generally originated by some disgruntled buyer, the contracts are revised. There are also obvious revisions because the language is often confusing. In an attempt to be clear and speak with a human voice, lawyers can sometimes royally mess up legal contracts because they lose sight of their audience and get all hung up on courts and judges.
For this reason, no purchase contract is typically not without a way to sue somebody over something. There is no black-and-white language in a purchase contract, regardless of what a person might be led to believe. A person can read one paragraph that defines a situation, seems to set the boundaries, and then a second paragraph can bring that first paragraph into question. By the time you reach paragraph 27, the 14th paragraph might appear ambiguous. It’s one of the reasons we have an 8-page California Residential Purchase Agreement and Joint Escrow Instructions (revised April 2013), coupled with its sister, the two-page Buyer’s Inspection Advisory (revised October 2002).
I look at that and I think what? C.A.R. could not come up with one single revision for the Buyer’s Inspection Advisory over the past 12 years? Here, C.A.R., have another glass of grappa. Also, when I started in real estate (you kids get offa my lawn), we had a choice between a one-page or a two-page contract. In fact, at one point, I created my own purchase contracts and professionally printed printed my brokerage’s purchase contracts in 3-part NCR — which at that time seemed like a brilliant move but was probably one of the dumber things I have done in my life. Hey, I was in my early 20s, so I had an excuse for my ignorance, not to mention, the 1970s was like one long LSD adventure.
I am astonished that buyers today sign this paperwork without engaging in a minor heart attack. It would almost be better in some ways if an agent just put blinders over a buyer’s eyes, stuck a pen in her hand and directed her to draw squiggles as her signature. Don’t read, just sign, would be the message. Yet, we encourage our buyers to read the real estate purchase contract and they don’t understand a darn thing in it.
Don’t even get me started on ZIPforms and why there is no field for the ZIP Code, of all things. I have brought this matter up to ZIPforms, but it has not been changed. Nobody else probably cares but I realize it’s a problem because of short sales. The bank negotiators do not like the fact there are no ZIP codes carried forth from page to page. Why don’t the C.A.R. lawyers spend time looking at this situation and fixing it? They should also fix the listing agreement fields so subsequent addendums match.
Bottom line, if a buyer or seller wants to challenge a portion of the purchase contract, a smart lawyer will find a way to do it. There is nothing black-and-white about our legal system. It’s more like 50 Shades of Grey . . . in more ways than one. But don’t ask your Sacramento real estate agent to define the real estate purchase contract because we don’t practice law.
