Ethics Guy®: To be or not to be
Or, perhaps, “To be or not to be [there]” is more apt, since today we’re looking at the REALTOR® Code Article 10 and Rules of Cooperation Rule 6.02 with a side-order of buyer risk management.
A recent online member discussion on whether a buyer agent should be involved in the home inspector’s debrief of buyers prompted this column, which tackles another “should” versus “must” conversation, addressing the questions: Is it legal? Is it a good idea? Is there a rule?
Rule 6.02 and REALTOR® Code Article 10 say:
6.02 Appointments
(a) Appointments by Cooperating Brokerages to inspect or show property may not be made directly with the seller unless otherwise specified on the data input form and published listing information; and
(b) Cooperating Brokerages must ensure that the buyer(s) is accompanied and supervised by a licensee throughout the appointment.
Article 10 Outside Professional Advice
| Article |
Interpretation |
|---|---|
| The REALTOR® shall encourage parties to a transaction to seek the advice of outside professionals where such advice is beyond the expertise of the REALTOR®. | 10.1 Outside professional advice would include, without limitation, lawyers, appraisers, home inspectors, accountants, insurance agents or brokers, mortgage consultants, land use planners and environmental consultants. |
Article 10 is telling us we mustn’t stand in the way of our clients getting specialized advice that we are not able (or qualified) to give.
Giving advice outside our expertise has never been a great idea because we’re accountable for what we say. But, being salespeople, some of us can’t resist filling in pauses in conversations with the sound of our voices, often to fill dead air with our notion of whatever the answer to our client’s question is.
Discipline is always better. Say as little as possible and always suggest that the needed information be clarified with an expert. Consistent with Article 10, buried somewhere in our regulator’s crypt of rules, there’s an expectation that we mustn’t ever steer our clients away from getting the advice they need to make a decision. So, stick to what you know, directing the client to someone who knows what you don’t, and then document what you’ve done.
Which brings us to the home inspection and debrief.
First, who has to be at the inspection appointment? Under Rule 6.02, someone with a real estate licence must be there, supervising the buyer and inspector throughout the appointment. But the rule doesn’t specify who. It could be the seller’s agent. It could be the buyer’s agent. It could be a licensed assistant of either. Or, it could be some other licensed designate. For example, you might find yourself asking a colleague, “Fred, can you help me out? I have a pressing tee time and the inspection is going to get in the way. Would you do me a favour and go over there, please?”
Once the inspection is complete and the property has been secured and locked, the home inspector will meet with the buyers to review what’s been found. Must we be at that meeting? Should we be there? Should we not be there?
In these polarized times, it can sometimes be difficult to remember that it’s okay to have varying opinions. I mean, the buyers know and hopefully value your opinion. And, very likely, you know a heck of a lot more about properties and the whole process than they do. So why not give them their money’s worth and tell them what you think?
That’s what agents do: they advise and clients decide. There’s a risk though, but it’s an acceptable one, in my opinion. It’s possible if you weigh in on some property issue that’s been found in the inspection, you could be accused of having an unseemly amount of influence on the buyers, perhaps causing them to say yes instead of no. While this is possible, I think the risk of undue influence is low, knowing that most buyers aren’t robots blindly doing what they’ve been told. I’ve not met too many passive buyers. It’s a rare one who doesn’t have an opinion. And I think they want and expect to hear what you think so they can then form their own opinion.
But what if the risk manifests itself in the form of a lawsuit in which the buyers claim you hovered too close by, affecting the conversations they were having with the home inspector?
With all due respect to our friends in the legal profession, my response is, “You could also get run over crossing the street, as they say.” If you act reasonably, give calm input and a professional opinion, I think you’re in a good position to defend yourself (with the help of our fine errors and omissions insurance lawyers).
No one, including judges, expects perfection. You can’t eliminate risk so just do your best. Stand up for your clients and help them. But don’t pressure them or give them advice or information you’re not confident about. Let the experts weigh in with that information.