No Excuse For Poor Practice… No Matter How Busy You Are!

Laura Kelly Mance
CRB, REALTOR®/President
Long Realty


When I hear transaction horror stories or follow some of the Arizona real estate blogs on Facebook, it occurs to me that a great number of Arizona licensees are lacking practical education. It could also be that they’re deliberately bypassing the rules, but why assume malice when ignorance suffices? I know that it’s difficult to keep up with industry changes, rules, policies, codes and standards of practice, but that’s no excuse not to try. Read through the following “real life examples” and see if you can spot the flaws.

  1. Real Estate broker sends a recruiting letter to agents with another brokerage maligning the actions of a 3rd brokerage and suggesting the agents would be “better protected from the enemy” if they worked for him/her.
  2. Agent puts a Coming Soon sign in front of a property for 2 weeks and then spends another 2 weeks holding the house open to the public. House is still not listed in MLS as either Coming Soon or Active.
  3. Buyers’ agent gives access to the garage to the Buyer prior to COE “for storage.” Of course, they moved in and started painting. How do you get them out if it doesn’t close? Get familiar with the eviction process.
  4. Multiple agents competing for a listing. Agent who doesn’t get it asks Seller what they could have done better(good practice). The agent who did not get the listing tells Seller their agent over-priced it and makes disparaging comments about the listing agent. (Really? And you don’t think you’ll get caught? That Seller is going to get on the phone so fast!)
  5. Broker remarks on a listing that “per Sellers written instructions, all offers will be held and considered on Wednesday 3/24. The property status changes to contingent on Tuesday 3/23. (Seller’s right to accept an offer? How does ADRE feel about misleading the public?)
  6. Here are a few clauses. If appraisal comes in for less than the contract price of $350,000.00, Seller agrees to reduce the price to whatever the appraisal comes in for. (how do you spell blank check?)
  7. Earnest money shall become non-refundable if escrow fails to close for any reason after the conclusion of the Due Diligence and response period.
  8. Buyer acknowledges that Seller is currently obligated by a prior contract to sell the Premises to another buyer. This is a backup Contract contingent upon cancellation of the prior contract. Seller retains the right to amend, extend, or modify the prior contract. Upon cancellation of the prior contract, Seller shall promptly deliver written notice to Buyer that they have moved into first position. (That looks good right? But when does the Buyers inspection period begin? When should earnest money be deposited? Can the Buyer cancel the contract if they find another house that meets their needs?)
  9. What about the ever-popular escalation clause? If you have two offers with escalation clauses do you ping pong the price back and forth off each one until you reach the highest cap? What about the net to Seller? One offer’s price may escalate to win the bid but the Sellers closing costs could be higher with that offer. Who wins if that wasn’t in the language?

All of the above clauses are dangerously written and put Buyers and Sellers at risk. But who will ultimately be blamed if the client is damaged? I’ve seen enough legal complaints to know that the words “negligent misrepresentation” will be used to describe the agent’s actions.

So, in this competitive and frenzied market, how are licensees supposed to keep up with rules and policies, and write bullet proof clauses on the fly? It’s really not that hard. Take some classes, use a clause library (every contingency needs a remedy), ask your broker or manager. Ask your client to repeat to you what their understanding is. Make sure that what you write tells the entire story. All #7 above needed was a simple sentence added… “unless contract is cancelled pursuant to the Risk of Loss provision or escrow fails to close due to Seller’s breach of contract.”

Yes, there are unscrupulous agents operating in our market. Call them on it. File a complaint with the appropriate entity, have your Broker call their Broker and don’t let bad practices slide. There are also agents who don’t know better. That one’s easy. We have a duty to be fair to all parties even if the other agent’s poorly written clause gave our client an advantage. Solve problems as you notice them and don’t give them the opportunity to grow into big issues.

I hear a lot of talk these days about competing models that threaten our industry. I sincerely believe the bigger threat is agents who don’t do their jobs well. Word travels fast when things go wrong. Our most unique asset as individuals in a real estate transaction is our ability to protect our clients. If we don’t do that, we’re no better than a pricing algorithm or an auto-dialer in a high rise who’s never seen an Arizona sunset. Bring value to every transaction and you will have a long and happy career in this business.


Laura Kelly Mance, CRB

President, Long Realty Company