Names of Prospects
The Buffalo Niagara Association of REALTORS® has received a number of inquiries in regards to cooperating brokers/agents not divulging the correct name of the buyer who has an appointment to inspect a property. The BNAR would like to point out a number of items for you to consider, when dealing with this issue.
- The Seller may not authorize a showing, if the buyer does not wish to disclose their name.
- Allowing an unnamed person to inspect the property, may not be in the seller’s best interest.
- Showing records are typically given to the seller in the event that the listing expires. The correct name may help to protect your commission.
- Duty desk agents should not divulge the names of buyers who have inspected a property.
- Keep in mind “procuring cause”. In the event of a commission dispute, there will be a record of the name and when they saw the property.
Take the time to review your office policy and be sure that you address these issues with your agents as well as your clients.
Faxing of Contracts
Faxing to other agents in the Transaction: When faxing contracts to other agents, it may be prudent to ask for a personal fax number and if the number is not available, ask them to be present at the fax machine to receive the contract. DocBox is a FREE service for WNYREIS members through Instanet and this is the perfect scenario for using it
Faxing to Attorneys in the Transaction? Don’t Breach Fiduciary Duties -- If you are faxing contracts to the attorneys involved in the transaction, it is strongly recommend that the seller’s agent fax the contract to the seller’s attorney and that the buyer’s agent fax the contract to the buyer’s attorney. Please note however, if faxed, you must follow up with a mailed copy to the parties within the next business day to be a valid delivery.
Letters of Intent
The BNAR has been receiving a number of inquiries about letters of intent. Here is an opinion from NYSAR Attorney, Anthony Gatto, regarding letters of intent: Any letter of intent that sets forth a purchase price is considered an offer. The issue discussed is whether or not the offer is binding upon the purchaser once accepted by the seller. Unfortunately, there is no bright line test as to what is considered a binding offer. Obviously, if the offer is submitted in a pre-printed contract, then it is binding. Usually, a "letter of intent" is not binding on the purchaser and therefore, the purchaser is free to back out of a deal before a formal contract is entered into. I would be extremely hesitant leaving the determination of what is or is not binding in the hands of a real estate licensee. This is a legal issue and such determination must be made by the seller's attorney.
If "letters of intent" are becoming more prevalent in your area, it is the duty of the Realtor to advise the seller of this new trend, explain that the "letter of intent" may not be a binding offer and determine if the seller would accept a letter of intent and/or a binding contract as an offer. It is well within the seller's discretion to state that they will not entertain offers submitted via "letter of intent".
Reminder: The NYSAR Legal Hotline is available, to all members, Monday through Friday from 9:00 a.m. to 4:00 p.m. by calling 518-436-9727.