It's the Rule

A New Day, and a New Way...
by: CEO Terese (Terry) Penza, CAE, RCE, e-Pro

November 2004

It is a new day and a new way of doing business in real estate. As of 1-1-04 every REALTOR® who is meeting a prospective
buyer for the first time must first ask if the buyer is currently in an exclusive agreement with another agent. If they
say “yes” then you are to send them back to that agent. In Illinois the license law specifically states if an agent is in
an exclusive agreement with a prospective buyer or seller it MUST BE IN WRITING! Please adjust your business practices
immediately to comply with the law and the code of ethics.

Another area of concern in the Code of Ethics and the practice of real estate in the Shore area is the issue of putting
everything in writing. The Code of Ethics is quite clear – everything is to be in writing. Time and time again I receive
phone calls from prospective purchasers stating they asked their agent representative to place an offer in writing and the
agent reply’s “that’s not how we do it here – we do things verbally and after negotiations, then we put it in writing”.
I quote NAR: “A REALTOR® acting as a buyer representative who refuses to follow the instruction of her client to put the
client's offer to purchase in writing is potentially in violation of Article 1 and Article 9. There may also be license
law consequences.” Again I say, you MUST adjust your way to doing business to comply with the law and the code of ethics.

Lastly, each and everyone office MUST adjust their listing agreement to comply with the new section in the license law
defining exclusive agreements. Here are suggested wordings: The Broker shall accept delivery of, and present to the
client, all offers and counteroffers to buy or lease the client's property. In addition, the Broker shall assist the
client and answer all questions regarding developing, communicating, negotiating and presenting offers, counteroffers and
notices that relate to the offers and counteroffers, until a lease or purchase agreement is signed and all contingencies
are satisfied or waived. NSBAR is currently changing their agreements. They have been changed on line.

Your Listing Agreements
Each office should review their listing agreement to comply with the license law that states: (225 ILCS 454/15-75 new).
(Section scheduled to be repealed on January 1, 2010)
Sec. 15-75. Exclusive brokerage agreements. All exclusive brokerage agreements must specify that the sponsoring broker,
through one or more sponsored licensees, must provide, at a minimum, the following services:
(1) Accept delivery of and present to the client offers and counteroffers to buy, sell, or lease the client's
property or the property the client seeks to purchase or lease;
(2) Assist the client in developing, communicating, negotiating, and presenting offers, counteroffers, and notices
that relate to the offers and counteroffers until a lease or purchase agreement is signed and all contingencies
are satisfied or waived; and
(3) Answer the client's questions relating to the offers, counteroffers, notices, and contingencies.
Only exclusive or exclusive “right to sell” listings are allowed in MLSNI and MAP (in fact that is the policy of NAR).

Q&A
I had a buyer’s agent tell me that it was illegal to “shop” her client’s offer. Is this true?
Not necessarily. If you represent the seller in a transaction and you have received an offer to purchase the property, in
the interest of serving your seller’s best interests, you might justifiably call those buyer agents or other prospects that
have shown an interest in this property. Of course, you would want to confer with your seller client before taking this type of
action. The downside risk would be that if the buyer became aware of this, he might withdraw his offer. While you would not
want to disclose the amount of the offer (because you don’t want to establish any sort of false ceiling above which other
interested buyers would not go), you might have helped your seller client by creating a market for the property. While we
are dispelling some commonly held mistaken notions, let us also consider that there is no “first in time rule.” In other
words, if you are the listing agent and you have one offer in hand and more on the way, there is not a legal or ethical
requirement that you present the offers in the order received. You are duty bound to present them as timely as practicable
and to serve your seller client’s best interests. So, depending on the individual facts in the situation, it might be timely
to present them all together when you meet the seller after work, as an example. Your seller might direct you to hold them
until he can review all offers received. You may legally and ethically follow his direction in this case. Here is one final
thought while we are on the subject of mistaken notions. There is nothing that requires the seller to abstain from looking
at other offers if he is in the midst of negotiating a contract. Let us consider that a buyer made an offer on seller’s
property. The listing agent presented the offer as required by law. In the meantime, another offer comes in to the listing
agent. The agent for buyer #1 and her agent might think that while contract #1 is in negotiations all other bets are off.
This is not the case. On these facts, a seller could look at the offer and, under general contract law principles, withdraw
his counteroffer on contract #1 prior to delivery of an acceptance by buyer #1 of contract #1. Of course, in situations like
the ones discussed here, you should recommend that your client consult legal counsel for advice about legal options and/or
the contract status. (Source: Betsy Urbance, IAR Legal Hot Line Attorney, www.illinoisrealtor.org).

I am a member of a team within a sponsoring broker’s company. If my team has its own “team name,” may I use that name in my advertising?
I have heard and seen many advertisements that do contain a team name that might be different than the sponsoring broker’s
company name. It is important to consider what the Real Estate License Act of 2000 (the Act) and the rules under the Act say
on this issue. First, consider that a sponsored licensee must advertise under his/her sponsoring broker’s company name.
(Section 10-30(d)). Next, consider that the content of advertising must not be false, deceptive or misleading in any way.
(Section 10-30(a)). Third, consider that a sponsored licensee is prohibited from advertising under his/her own name. So, if
a group of sponsored licensees, or one licensee together with an unlicensed assistant(s), operates under an assumed “team
name,” the sponsored licensee(s) would not be in compliance with the Act and its rules if it is the individual licensee(s)
that have registered this name as an assumed name (i.e., the team registered the team name as a DBA, “doing business as”).
However, if you look at Rules Section 1450.90 regarding assumed names, you will see that the sponsoring broker might register
an assumed name. So, while the sponsored licensees could not establish and register a DBA, if the sponsoring broker were to
register the team DBA with the appropriate authorities, and assign this name to the team within the sponsoring broker’s
office, it could be done in accordance with the Act and the rules. It is also important to remember that the ad content
must not be deceptive or misleading and must still contain the sponsoring broker’s company name. There are certainly other
legal issues to consider when operating as a “team” within a brokerage company. You can read more on those issues in past
articles of IAR’s Designated REALTOR Exclusive newsletter, written by IAR General Counsel Steve Bochenek at Members Only,
Publications—view the June 2002 and the December 2002 issues. You should contact your company legal counsel for specific
advice as to ad copy and for advice on how to register an assumed name. (Source: Betsy Urbance, IAR Legal Hot Line Attorney,
www.illinoisrealtor.org).