What do you think about asking a FSBO if you can host an open house (or cohost) with them? Are there legal ramifications for the realtor?

Asked by Laurie Phillips, Andover, MA Mon Oct 4, 2010

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John Souerbry, Agent, Fairfield, CA
Mon Oct 4, 2010
I'm not going to make a legal comment, as I'm not a lawyer, but I do believe 1) this is a great idea and 2) there is some risk. My first broker/employer did not allow her agents to enter into transactions in which the other party was not represented by a licensed agent or an attorney. Her belief, which I found out later was widely accepted by brokers in our area, was that the person who was licensed always ended up giving at least administrative advice to the other party in order to get the paperwork flowing. Giving even an ounce of advice put the broker at risk if anything at all went south in the deal. Granted, agents on opposite sides of a deal often help each other with reminders about due dates, extra paperwork needed, etc., but it's between licensees. I attended a FSBO open house years ago co-hosted by a buyer's agent - there was a big sign at the entrance disclosing that the agent did not have a listing agreement with the seller and buyers attending were not required to make offers through her. Might be good to consult an attorney for something similar.
1 vote
Laurie Phill…, Agent, Andover, MA
Tue Oct 5, 2010
Thank you to all who offered your advice and years of experience!
0 votes
Kevin Olson,…, Agent, Colorado Springs, CO
Mon Oct 4, 2010
Most Brokers don't allow this without some form of contract to CYA. Be careful in advertising, you can't have any part of it if the home isn't listed, and many agents have been caught. We as agents cannot advertise unlisted property. Put some type of contract in place, even just for a day, to eliminate any legal ramifications. Who knows, the seller might enjoy the day and decide being in a contract isn't such a bad thing!

Good luck and good question!
Web Reference:  http://www.liveinsprings.com
0 votes
Ellen Friedm…, Agent, Cambridge, MA
Mon Oct 4, 2010
You could sign a listing agreement for just that day.
Web Reference:  http://www.ellenfriedman.biz
0 votes
Louis Wolfs…, Agent, Needham, MA
Mon Oct 4, 2010
My question is who do you represent? How are you going to get compensated? Of course there are always legal ramifications for you and your office.
0 votes
Desari Jabbar, Agent, Stone Mountain, GA
Mon Oct 4, 2010
I'm not sure if open houses work in today's market. But, if you decide to do it, make certain the sellers agree to pay you a commission for any buyers who come in because of the open house you have advertised.
Web Reference:  http://www.DesariJabbar.com
0 votes
Mack McCoy, Agent, Seattle, WA
Mon Oct 4, 2010
I'm not a fan, because there are other things to do with a Sunday.

Like holding an open house on a colleague's listing where visitors don't have to read through a bunch of disclosures to understand why you're sitting in a FSBO. Or going around introducing yourself to other FSBOs.

I understand the temptation; if I go the extra mile, they may list with me. Well, one thing I've learned from many years in the business is that if you keep prospecting, soon enough you'll come across people who can't wait to have you represent them and have you go the extra mile AFTER they've listed with you.

All the best,
0 votes
Scott A. Nel…, , 02155
Mon Oct 4, 2010
The only downside I could see would be a need for the seller & agent to get some sort of waiver for representations made by the seller and to limit the liability of the agent/broker. Talk to your E&O vendor or corporate attorney to develop this waiver to protect yourself & broker. My biggest concern would be the "sub-agency" relationship made & vicarious liability that may be possible.

Just my $.02, great idea though
Web Reference:  http://www.MedfordHouse.com
0 votes
Vincent Vill…, Agent, Chula Vista, CA
Mon Oct 4, 2010
Thats a great idea!, I dont talk about legal ramifications but it is a way to get some good buyers in..
0 votes
Diana Butler, Agent, Beverly, MA
Mon Oct 4, 2010
Thanks Laurie - This is a great question.
0 votes
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