It's the Rule

by: President & CEO Terese (Terry) Penza, CAE, RCE, e-Pro

There are so many myths in real estate, but let me cover some of my "favorites".

After an offer has been accepted you do not have to bring any more offers to the owner and should tell people not to bring one in because it is too late. WRONG! Even if you are sitting at the closing table and someone comes rushing in with an offer you MUST give it to the owner PERIOD - no ifs, ands or buts. Yes, I know they have a binding contract with a buyer but they have the right to see the offer and if they are considering the offer they should discuss it with their attorney. Who knows, maybe the sellers will give the first buyers money to walk away from the first offer to take the second. It is not your final decision -- it is theirs.
Listing agreements are not power of attorney!

One you have received permission to show a certain property you can return to that property as many times as you want without informing the listing agent (especially if it is vacant). WRONG. You must ALWAYS get permission from the listing office prior to entering a property.

You find a property in MLS and when you get to the location there is a For Sale by Owner sign in the front yard so you try to get the owner to list with you. WRONG! The only LEGAL way to have a listing in the MLS is that there is an exclusive listing. It is against the license law and the Code of Ethics to get someone to break one contract to enter into another contract.

Send your buyers around to see properties and then when they find what they want you tell them to come back to you so you can write the offer. WRONG! This might work if you have a contract with the buyer and the buyer is paying you from his own wallet and not the transaction. If you are expecting the transaction to pay you are going to have to do more work than just write the offer and collect a commission if you want to be the prevailing party in arbitration.

I can get a commission on every house that is for sale in the entire universe. WRONG! Someone has to offer compensation to you and then you (actually your office because all monies come from the sponsor broker) accepts the offer of compensation.

I have a real estate license in Illinois therefore I can sell anything in the universe and get a commission. WRONG. First, only sponsoring brokers collect commissions. Second, you are only licensed to sell in Illinois. You may receive a referral fee for transactions outside your licensed state but not a commission. If you sold something in a state or country that you do not have a license and the person refuses to pay you then you would not be able to collect in court because you have no standing in that state. So, if you want to put your license in jeopardy and maybe work for nothing, then ignore this warning.

I am an independent contractor therefore I do not have to work thru my broker. WRONG. All listings are taken on behalf of the sponsoring broker; all buyers you work with are the brokers. This is a tax status not a way of life.

Have others you want to add to the list? Want to debate me on those listed above? Join our ListServe by emailing administrator@nsbar.org