by Monica Staaf, RIAR General Counsel

1. Not getting it in writing –  Make sure that offers, listing agreements, and other contracts are in writing; include or exclude fixtures and items such as washer, dryer, and lighting fixtures from the sale; extensions for inspections, contingencies, and closing dates; requests; repairs and work that must be done before closing; and commission terms.
2. Not following advertising rules.  Make sure to list the company name – not just yours or a team name - on all advertising (web, print, social media, email, mailings, and business cards) so that it is more prominent than yours. State regulation requires you to state on your business cards that you are a real estate salesperson.
3. Accepting or soliciting kickbacks for leads.   It is illegal for real estate licensees to accept or offer payment or something of value for referrals from lenders, mortgage brokers, title companies, inspectors, and other settlement service providers.  Do not accept free tickets to sporting events or concerts, subsidies for advertising, or lead generation services.   If you share marketing costs with a mortgage broker, make sure that the benefit that each of you receives is proportionate to the money that each of you are spending.
4. Not checking local ordinances.  If you’re involved in a real estate transaction in a new market area for you, make sure that you understand local requirements.    Some communities have ordinances that regulate cesspools and septic systems, sewer assessments, registration of rental property, fire safety requirements for carbon monoxide and smoke detectors; local transfer taxes, and zoning restrictions on how many people can live together.
5. Relying only on assessment records.  An assessor values real estate to raise tax revenue for the municipality.   Just because assessment records show that a property has an addition or is being used as a three-family home doesn’t mean that the owner ever obtained a building permit or is using the property legally.  If you need to know the legal use of a property, do not rely on assessment records.  Check with the local building inspector or zoning department.  Beware of multi-families, in-law apartments, sellers who did their own remodeling or repairs, building code violations, and septic system restrictions that restrict the number of bedrooms.
6. Not disclosing (or understanding) whom you represent.  Disclose conflicts of interest when you (or a family member, trust, LLC, etc.) personally are selling, buying, or renting.  Pay attention to divorcing couples, multiple heirs to an estate; and short sales.
7. Not providing mandatory disclosures.  Make sure that disclosures, such as lead, sales, Mandatory Real Estate Relationship, personal or familial interest – are provided early in the transaction.
8. Helping landlords illegally discriminate.  Common areas of discrimination are landlords who don’t want to rent to families with children; want to limit the number of people in the unit without legal justification, or ban a tenant from having a service animal. 
9. Engaging in price-fixing or group boycotts.   Avoid discussing what your company charges your clients with licensees from other real estate companies. Your company should make independent decisions about what you charge and how you compensate real estate licensees from other companies.
10. Acting like a lawyer (or CPA, home inspector, tax attorney, engineer, or short sale negotiator) instead of referring your client to a professional.   Refer specialized questions to specialists. Refer clients to specialists for questions about home inspections, structural issues, capital gains, the non-resident withholding tax, forgiveness of debt and short sales, and more.

BONUS:  

Bluffing or guessing.    If you don’t know the answer to a question, it’s fine to say, “I don’t know but I will research this issue and get back to you.” Your customers, clients, and other real estate professionals want the right answer – not the first one that pops into your head.   Ask your broker, your company attorney, or a specialist, or contact the RIAR Legal Hot Line (401) 432-6945 or email [email protected].