Transaction Brokerage and Limited Confidentiality

//Transaction Brokerage and Limited Confidentiality

Transaction Brokerage and Limited Confidentiality

Dear Teena

Transaction Brokerage limited confidentiality does help the brokerage with risk management after a failed listing presentation.

Say a brokerage fails to get the listing but during the listing presentation the seller blurts out the seller’s motivation to sell (e.g. job transfer, new child, marriage, divorce) and or seller’s bottom price (e.g. listed at $500,000 but seller would take $450,000)…then that same brokerage has a licensee who later returns to this same listing with a buyer client. (Property is listed with another brokerage.) Prior to 2017, the brokerage was in between the rock and the hard place. Tell their buyer client the seller’s motivation and bottom price…then the seller might sue the brokerage. Don’t tell their buyer client about the seller’s motivation and bottom price…then the buyer might sue the brokerage. Now, the brokerage has a 2017 license law liability shield while not telling the information (e.g. limited confidentiality).

Best to use SCR transaction brokerage forms (long versions for buyers/sellers) which clarifies many transaction brokerage (nonagency) issues. SCR136 buy-side transaction brokerage….SCR221 sell side transaction brokerage…

https://www.screaltors.org/wp-content/uploads/Forms/221.pdf

Limited confidentiality basically includes the motivation to buy/sell…and includes top/bottom price.

(2) Licensees operating as transaction brokers are required to disclose to buyers and sellers their role and duties in offering customer services to the consumer that shall include the following:

(a) honesty and fair dealing;

(b) accounting for all funds;

(c) using skill, care and diligence in the transaction;

(d) disclosing material adverse facts that affect the transaction, or the value or condition of the real property and that are not readily ascertainable;

(e) promptly presenting all written offers and counteroffers;

(f) limited confidentiality, unless waived in writing by a party. This limited confidentiality prohibits disclosing:

(i) information concerning a buyer’s motivation to buy or the buyer’s willingness to make a higher offer than the price submitted in a written offer;

(ii) factors motivating a seller to sell or the seller’s willingness to accept an offer less than the list price;

(iii) that a seller or buyer will agree to financing terms other than those offered; and

(iv) information requested by a party to remain confidential, except information required by law to be disclosed;

(g) additional duties that are entered into by separate agreement.

(29) ‘Substantive contact’ means contact in which a discussion or dialogue between the consumer and the associated licensee moves from casual introductory talk to a meaningful conversation regarding the selling or buying motives or objectives of the seller or buyer, financial qualifications, and other confidential information that if disclosed could harm the consumer’s bargaining position.

(f) limited confidentiality, unless waived in writing by a party. This limited confidentiality prohibits disclosing:

(i) information concerning a buyer’s motivation to buy or the buyer’s willingness to make a higher offer than the price submitted in a written offer;

(ii) factors motivating a seller to sell or the seller’s willingness to accept an offer less than the list price;

(iii) that a seller or buyer will agree to financing terms other than those offered; and

(iv) information requested by a party to remain confidential, except information required by law to be disclosed;

Posted by : Byron King on 10/09/18 (This information is only accurate as of 10/09/18. You must contact SCR for updates and changes to this information after 10/09/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)

By |2018-10-09T12:31:08+00:00October 9th, 2018|Legal FAQs|0 Comments

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