Deja Vu Inside Inman's "Broker Internet Strategy Session" Tackles the Age-Old Off-Line Question in a 2.0 World~How Can Brokers Protect Themselves From Agent Promotion?

lw4n6581.jpg Deja Vu

In the late 80's, after a fellow rookie sales agent confidently explained his questionable activity, I responded with, "I don't think you can do that." He bluntly replied, "Who cares, they're not going to sue me, they're going to sue the broker." What a surprise when less than 10 years later, that same agent was repeatedly being sued as a Broker/Owner. Why? Because of the questionable activity of his unsupervised sales agent.

In the late 90's, I was among a handful of professionals composing Silicon Valley's first interactive real estate Q & A online forum. The San Jose Mercury News started "Virtual Real Estate - Your Interactive Forum." The online Q & A was published in their Saturday real estate newspaper section.

My concern was the same then as it is now: Will agents and/or brokers answer online questions outside their areas of expertise? (As many do off-line) - They did. Which, by the way, is strictly prohibited. Equally problematic, what are the ramifications of answering questions from another agency's client? Worse yet, answering those questions, (often deemed as counseling), while individuals are in the middle of a transaction. This is, totally out-of-the-question.

Off-line or On-line Standard of Care

Agents and brokers have fairly strict guidelines set by local and nation trade association bylaws. Enforcement of these bylaws is conducted at REALTOR associations, in the form of confidential Professional Standards hearings. These disciplinary and arbitration hearings are filed by consumers or fellow members when by-laws have been breached. As a Presiding Officer for Professional Standards, I know the resolute penalties involved, and the incredible value of this form of dispute resolution.

However, when a sales agent breaks a state law, both the agent and the broker could become involved in civil and criminal litigation. Hopefully, the Department of Real Estate, (DRE), will be notified. Unfortunately, the forthcoming settlement often includes a stipulation that the DRE will NOT be notified. My favorite - when an agent and/or broker speaks of a commission rate with other licensees outside his/her company - he/she has just broken a Federal Law.

Now, as the industry is being catapulted into the untraditional world of 2.0 interactive real estate, many old-school managers and broker/owners are left scratching their heads. Even worse is when a purported leader of cutting edge real estate was asked about his agents’ activities in cyberspace, he disinterestedly replies, "I have no idea what anyone is doing," and his remark generates laughter from the audience of brokers.

This leader of industry was a panelist at Brad Inman’s Real Estate Connect "Invitation Only" broker session held in San Francisco last week. Inman later commented to this captain of industry, "Like you said, you don't know what they're doing," Inman was politely interrupted with his prompt response, "I trust my managers to hire honest people," but I am "concerned with agents giving legal advice."

I've followed prominent San Jose real estate attorney Ron Rossi throughout my career. I've interviewed him many times, and in the 90's had the pleasure of serving on his law firm's training arm, California Real Estate Solution. He often quipped, "Agents don't know that they don't know."

When a man at the top, jokes about his ignorance regarding agent activity in cyberspace, you know it is only a matter of time before he'll be educated. Only, he'll learn the hard way, through the new legal arena of 2.0 real estate litigation.

Pat Kapowich, SiliconValleyBroker.comsilicon.jpg