Buying and selling your own property

From time to time, we are asked what a licensee is required to do when they are the buyer or seller. When you are selling or leasing your own real estate, the answer is pretty clear. You must disclose your licensed status before you enter into a lease or an Agreement of Sale with a consumer.

But when?

If you are marketing (i.e., advertising) your own property, then you have to state that you are a real estate licensee in the ad. If you list your property with a broker, however, then you need to disclose your licensed status before the agreement or lease is signed. A common practice is to state right in the document that the seller/landlord is a licensed real estate salesperson.

What about when you are buying property? Are the requirements different? There is no legal requirement that you disclose your licensed status when you are buying real estate. Why did I emphasize “legal”? Because if you are a REALTOR®, you do have a greater responsibility than is required by either RELRA or the Regs. The NAR Code of Ethics states at Article 4: “REALTORS® shall not acquire an interest in or buy or present offers from themselves, or any member of their immediate families, their firms or any member thereof, . . . without making their true position know to the owner or the owner’s agent or broker.” So while you may not have a legal duty to disclose your licensed status when you are buying real estate, you do have an Ethical obligation to do so.

As with the legal requirement to disclose your licensed status in writing before an agreement is signed, the Code of Ethics also suggests that the disclosure be in writing before signing any contracts.

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Tags: buyer, seller

This entry was posted on Monday, June 15th, 2009 at 4:23 pm and is filed under Legal Issues. You can follow any responses to this entry through the RSS 2.0 feed.