ISSUE: Does the listing agent have an obligation to further respond?

ANSWER: No.

DISCUSSION:         

Pursuant to the Arizona Administrative Code, a listing agent is required to submit all offers to his client.  See A.A.C. R4-28-802(B). However, an email inquiry from the buyer’s agent is not an offer as contemplated by that provision. Pursuant to the Arizona Statute of Frauds, an offer to purchase real property must be signed by the buyer (not an email from an agent) and contain all material terms. See A.R.S. 44-101. The email from the buyer’s agent is not signed by the buyer nor does it have any terms other than the price. The email is therefore not an offer and the listing agent has no obligation to respond further.

The post An Unsigned Email from an Agent is Not an Offer appeared first on Arizona Association of REALTORS®.

Before the close of escrow, sellers should identify every connected device that will remain with the property and prepare those devices for transfer. In most cases, this means removing personal information, deleting user profiles, disconnecting devices from existing cloud accounts, and performing a factory reset. Sellers should also delete any mobile apps or online dashboards that once allowed them remote access. Once a home changes ownership, former owners should no longer be able to view camera feeds, unlock doors, adjust thermostats, open garage doors, or otherwise interact with the property’s technology.

A useful rule of thumb is this: if you wouldn’t let the seller keep a physical key to the house after the sale, don’t let them keep access to the home’s technology. Digital access can be just as powerful as a traditional key. Sellers should avoid leaving behind usernames, passwords, or active accounts tied to their personal email addresses. Likewise, buyers should be encouraged to create new accounts and passwords rather than simply continuing to use credentials established by the previous owner. Passwords should be unique and secure, not based on the property’s address or other easily guessed information.

REALTORS® can help facilitate a smoother transition by discussing smart-home devices during the listing process and documenting which systems will remain with the property. Sellers may also want to gather instruction manuals, warranty information, app names, and device registration details for the buyer. If a device requires a transfer process through the manufacturer, preparing for that process before closing can help avoid frustration and service interruptions after possession changes hands.

Technology has become an important part of homeownership, and its transfer deserves the same attention as any other aspect of the transaction. By helping sellers properly disconnect, reset, and transfer smart-home systems, REALTORS® can reduce liability, protect privacy, and ensure buyers take possession of not only the home itself, but also complete control of the technology that comes with it.

The post The Forgotten Closing Checklist: Smart Home Device Transfers appeared first on Arizona Association of REALTORS®.

ISSUE: Does the listing agent need a buyer broker agreement signed by the prospective buyer, who wishes to remain unrepresented, to allow the prospective buyer to view the house?  

ANSWER: No.

DISCUSSION:         

Pursuant to the NAR antitrust settlement and the rules applicable to REALTORS® and MLS participants, a buyer broker agreement is required as a condition to providing access only if the agent is representing the buyer. Here, the listing agent represents the seller exclusively. Because simply allowing a buyer to view the house does not amount to an agency relationship, a buyer broker agreement is not required as a condition to provide the buyer access.

The post A Listing Agent Does Not Need a Buyer’s Broker Agreement to Allow a Prospective Buyer to See a House appeared first on Arizona Association of REALTORS®.

ISSUE: What sort of progressive discipline complies with A.A.C. R4 – 28-1103(B)?

ANSWER: See discussion.

DISCUSSION:

The Department of Real Estate has indicated that multiple verbal warnings do not comply with A.A.C. R4–28-1103(B). However, the Department has provided an example that a verbal warning for a first offense, followed by a written warning for a second offense, followed by a fine for a third offense would comply with A.A.C. R4–28-1103(B).

The post Policy and Procedure Manuals Must Contain Provisions for Progressive Discipline appeared first on Arizona Association of REALTORS®.

Social Media Main Page

Display your employing broker name at the top of the social media page in a clear and prominent manner. For example, Facebook profiles include residence location, work history and education. It is prudent to include one’s employing brokerage under employment so the profile shows something like: “REALTOR® at XYZ Brokerage.” On Instagram, adding a bio to your profile could include your profession and your brokerage. Almost all platforms include an opportunity to display your occupation and the brokerage you work for. That information is available prominently and seen without the need to scroll.  Many brokerages also have a profile page on social media. If so, listing your brokerage handle on your profile page is another way to reinforce the identity of your brokerage.

Social Media Posts

Posts typically can include a short introduction to the post. Best practice would be to introduce an advertising post with your name and your employing brokerage (e.g. “Peggy Smith at XYZ Brokerage Just Listed!”). Many posts also include a photo or video. Adding a watermark of your employing brokerage’s name is another avenue to identify your brokerage in a clear and prominent manner. Make sure the watermark doesn’t blend into the background and is large enough to be easily seen. Finally, tag your brokerage on the post to bolster compliance efforts.

Social Media Videos

The easiest way to stay compliant with advertising videos is to introduce yourself and brokerage at the beginning of the video (e.g. “Hi Everyone, this is Peggy Smith of XYZ Brokerage and I want to show this fantastic new listing I have for sale.”). The ADRE has stated that this act alone fully complies with A.A.C. R4-28-502(E). As stated above, adding a watermark of your employing brokerage’s name on the video is another route to stay compliant. Finally, tag your brokerage on the post or wear a brokerage shirt to bolster compliance efforts.

Additional Best Practices

Many other advertising rules apply to real estate licensees. In addition to the above, licenses should also consider:

• Getting their client’s consent for the specific advertisements they intend to create
• Having their client review the advertisement before it is published
• Adding “owner/agent” when advertising property owned by any licensed or previously licensed real estate agent (even from other states)
• Making sure the advertisement’s representations are clear and accurate
• Disclosing any specific alterations to photos made by AI or graphic software
• Obtaining the listing agent’s explicit permission when advertising other agent’s listings and clearly stating they are not the listing agent in the advertisement
• Removing the advertisement if requested to do so by the owner

Aaron M. Green, Esq., a licensed Arizona attorney, is the General Counsel for the Arizona Association of REALTORS®. This article is of a general nature and reflects only the opinion of the author at the time it was drafted.  It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.

The post Tips For REALTORS® to Comply with Advertising Rules When Posting on Social Media appeared first on Arizona Association of REALTORS®.

The Arizona REALTORS® has previously provided guidance to its members on how to refer other professionals while minimizing the risk of being sued for a negligent referral: I Made a Referral- Am I Liable for any Resulting Negligence? That article suggested that REALTORS® should consider: 1) providing more than one referral option; 2) insisting the client choose whom to hire; 3) encouraging the client to vet the hire and, if applicable, confirm they have insurance coverage; and 4) not directly hiring any person or business on the client’s behalf.

To illustrate the wisdom of the advice, the article discussed Thomson v. McGinnis, 465 S.E. 2nd 922 (W.Va. 1995) where a real estate broker hired an inspector on behalf of a buyer. Unfortunately, the inspector was not certified, incompetent, and failed to recognize that the furnace was faulty and unsafe to operate. The court found the broker liable because when such broker volunteers to secure an inspection of the premises by retaining on behalf of the buyer a third party to conduct the inspection, they are liable for any damages caused by a negligent inspection.

A more recent New Mexico case reinforces the potential for liability. In LM Ins. Corp. v. I Do Albuquerque, 527 P.3d 685 (N.M. App. 2022), a homeowner was unable to find a roofer to correct problems discovered by a home inspection. Their transaction broker volunteered to “take care of it” and found a roofer to perform the repair. Unfortunately, the roofer was neither licensed nor insured. Furthermore, the roofer performed the work negligently and caused a fire that destroyed the home. The court ruled that the transaction broker was 45% at fault (liable for $143,188.60), despite the fact that the transaction broker lacked a fiduciary duty to the homeowner and even though their listing agreement imposed a duty on the homeowner to independently investigate any contractor recommendations.¹

Both cases emphasize that when the broker retains the professional on behalf of the client, they are voluntarily assuming a duty to ensure that the professional is qualified and/or insured. Directly hiring a professional may also put the broker at risk of being liable for payment. It is therefore advisable for brokers to avoid directly hiring the professional despite REALTORS® natural compassion to be helpful. It is also advisable for REALTORS® to provide their client with available resources so that the client can independently confirm whether the referral is currently licensed and/or insured:

The Arizona State Board of Technical Registration licenses inspectors. Individual and Business licensee searches are available at this website: https://azbtr.portalus.thentiacloud.net/webs/portal/register/#/

The Arizona Registrar of Contractors licenses contractors. Contractor licensee searches are available at this website: https://azroc.my.site.com/AZRoc/s/contractor-search

¹The homeowner was found to be 5% at fault for failing to independently investigate the contractor.

Aaron M. Green, Esq., a licensed Arizona attorney, is the General Counsel for the Arizona Association of REALTORS®. This article is of a general nature and reflects only the opinion of the author at the time it was drafted. It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.

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