Realtor/investor disclosure, any solutions?! - Posted by Lily Henderson

Posted by BlueAngel on September 21, 2003 at 22:38:57:

Advertising guideline is also found in business and Profession code 10140.6:
"…A real estate licensee shall not publish, circulate, distribute, nor cause to be published, circulated, or distributed in any newspaper or periodical, or by mail any matter pertaining to any activity for which areal estate license is required, which does not contain designation disclosing that he is perfomring acts for which a real estate license is required…" Don’t ask me what it means. Maybe Mr. Bronchick can advise further. I would also be interested on the answer regarding business cards as well.

Don’t get discouraged. Despite the garbage, a license can work your advantage. The new buyers are mostly nervous and can appreciate your knowledge. Buyers and sellers prefer someone who is experienced and have complete knowledge of the market, that’s why 90% homes in my area (No CA) sold through agents.

Realtor/investor disclosure, any solutions?! - Posted by Lily Henderson

Posted by Lily Henderson on September 21, 2003 at 04:26:52:

Hi,

Getting my RE license soon. However, I know for a fact that in CA I must ALAWAYS disclose licensee status in real estate transaction related adversting(I assume RE investing included). That said, the problems I see which the license could present are:

  1. If I print up cards or do signs etc “I buy houses with cash. Divorce, Relocating no problem…” Then I suppose you have to add “realtor” somewhere on the card /sign. Now prospects will be thinking it’s just another realtor ad.
  2. Worse, if I advertise on newspaper trying to flip a property to a buyer. "3 bed 2 bath, fast sale, call xxxxxxx, " CA law says in advertising I not only need to disclose my future license# but also my future broker’s name (ReMax, Century 21…). I can already smell trouble from many sides. This can also be problematic on flyers. Any suggestions?

Also, Is there a standard addendum somewhere that phrase approriately for disclosure of such phrase when I’m a principle buying property but also an agent? Thanks!

Re: Realtor/investor disclosure, any solutions?! - Posted by John Merchant

Posted by John Merchant on September 21, 2003 at 13:49:44:

I know a number of licensed investors, and to my knowledge none of them have had any problem with disclosing…although one guy HAS had significant trouble because of NOT disclosing, and other sleazy practice.

Suggestion: On printed ads, how about having your corp/LLC do the advertising? That way, it’s not you personally, so probably no disclosure would have to be made in those ads. You could confirm this in a minute by checking with your state’s RE Agency.

e.g.: " We buy houses for CASH! Call now! (xxx)-xxx-xxxx. ABCLLC"

When you prepare and present a written offer to seller, you’ll want to disclose there, in writing that you are an agent…but if you’ve got a motivated seller and he wants your deal, he’s not going to care a whole bunch what you are.

Another issue though: Remember, you’re going to be working under a Broker, and if you already know who it is, you’d better clear this with him/her, as anything you do in or associated with RE has got to be cleared with broker…it’s broker’s neck on the block if any of his agents screw up & break the law.

But Mr. Bronchick’s past posts said… - Posted by Lily Henderson

Posted by Lily Henderson on September 21, 2003 at 20:53:50:

http://www.creonline.com/legal/wwwboard7/messages/7678.html

…so even I advertise as my own S corp or LLC, I need to diclose my license on ad, right?

Bronchick’s past posts said… - Posted by John Merchant

Posted by John Merchant on September 22, 2003 at 05:08:36:

Whoa!

First, whenever we’re talking about STATE RE Codes, Regs., etc., there’s a separate one in each of 50 states… there’s no such thing as ONE* for all USA.

Secondly,if you’re going to be MLS member, ask your Broker, or check your MLS Rules in your state. MLS Rules are normally a good bit tougher than state RE Regs. Every MLS member is or should be as concerned about its rules just as much as state regs.

While this could be a rule that most or all states have enacted, I suspect it’s not and each state (even local?)MLS Ass’n may have its own.

If you won’t be an MLS member, just call and discuss this with one of the folks at your RE Agency. They’re human and answer questions like this all the time, and they’d far rather discuss it with you now than when some aggrieved member of public files a complaint against you & your broker.

Third, even if your state RE agency people say no such requirement there, your RE Broker may require it of his/her agents.

A RE Broker might be held legally responsible for nearly anything his/her agents might do, buying or selling RE, and there’s enough potential liability even if all agents follow the rules completely.

One of the keys to lawsuit prevention is to disclose everything possible. This is an area where one just can’t do overkill. See Joe Kaiser article on “Greatest Doc”** for a great disclosure form.

Fourth, and as other replies have rightly said, even if your ad has to say “agent/owner”, that’s hardly the scariest term I ever heard.

If you’re dealing with a truly motivated seller, he/she is not going to slam the phone down on a possible savior calling with a solution!

Remember, as a buyer, that should be what you’re trying to SELL(!), a solution to seller’s problem.

I’ve bought a good bit of RE from motivated agents & found them to be easier to deal with than Mr.John Q Public. RE Agents can get themselvees into just as much trouble with their own RE as anybody else, and there is no such critter as the RE Agent who knows it all. I’ve found RE Agents to be more realistic in knowing when they’re in trouble and more willing to “bail” at the right price.

*There definitely is a “band-wagon” and state RE Agencies watch with interest to see what other states are doing and when they see something they like they try to work it into their own rules asap.

**In Articles on this site.

Hope this helps… - Posted by BlueAngel

Posted by BlueAngel on September 21, 2003 at 22:26:09:

Hi Lily,

Good question. Based on what I found, just an “agent/owner” disclosure will do for your selling and if property is NOT listed. However, if it’s listed you should disclose your realtor/agency name.

Code of Ethics article 12 and Standard of Practice 12-5 and 12-6—
"Realtors shall not advertise nor permit any person employed by or affilated with them to advertise LISTED property without disclosing the name of the firm. Realtors, when advertising UNLISTED real property for sale/lease in which they haven ownership interest, shall disclose their status as both owners/landlords and as Realtors or RE licensees.

This is for reference only, not intend to be any advice. There are many garbage codes to read and follow. But we should clear this out of the way and focus on doing deals.