A Realtor group in Montana has asked a state regulatory board to consider whether it is a license violation for a listing broker to allow agents representing buyers to directly submit offers to a home seller.
Zane K. Sullivan, a lawyer for the Great Falls Association of Realtors, said in a petition to the Montana Board of Realty Regulation that the association "has encountered an MLS listing which advertises the particular company’s ability to put buyer agents in direct contact with sellers, completely foregoing the listing agent."
The MLS information, stated Sullivan, "indicates that buyer agents can present their offers directly to the sellers and also set their appointments directly with the sellers. (The association) believes these statements to be in violation of the negotiation duties required by a broker," based on state code.
"The question presented for declaratory ruling is: Can a real estate broker or salesperson negotiate away part of the negotiation duties and perform less than what is defined under the definitions of ‘broker’ and ‘negotiation’ set forth by Montana code?"
Regulators and lawmakers in other states have considered Realtor-backed rules or legislation, sometimes referred to as minimum-service measures, that seek to establish a set of minimum services that real estate licensees are required to perform for their clients.
U.S. Justice Department and Federal Trade Commission officials have opposed such measures, claiming they could be anticompetitive and deprive consumers of choices in real estate services. Meanwhile, some industry officials have countered that such measures seek to protect consumers by ensuring an adequate level of services in real estate transactions.
In Montana’s case, the Realtor group is seeking clarification of state code that has been on the books for many years.
Terry Stevenson, association executive for the Great Falls Realtor group, did not respond on Thursday to Inman News’ requests for comment.
Grace Berger, executive officer for the state Board of Realty, said that the matter has not yet been placed on the board’s agenda, and the board’s next meeting is scheduled on June 4. No other Realtor groups in the state, including the statewide Realtor group, have raised the question with the regulatory board, Berger said.
There is no provision under the state’s real estate code for consumers to waive negotiation services performed by a real estate licensee, she said, adding that she is not aware of a broker being cited for failure to perform negotiations for a client.
State code provides that a broker "negotiates or attempts to negotiate the listing, sale, purchase, rental, exchange or lease of real estate," and defines "negotiations" as "efforts to act as an intermediary between parties to a real estate transaction; facilitating and participating in contract discussions; completing forms for offers, counter-offers, addendums and other writings; and presenting offers and counter-offers."
The Montana Board of Realty Regulation had been the target of a U.S. Justice Department investigation over the state’s ban of real estate rebates, gifts and other promotional items offered by real estate licensees to their clients.
The Justice Department has conducted a series of investigations over similar rebate restrictions in other states, and the board voted earlier this month to amend its policy to allow rebates.
"The board determined it is reasonably necessary to amend this rule," according to a notice issued by the board. "Following the board’s August 2007 amendment of this rule, the U.S. Department of Justice advised the board that the language may be improper."
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