Risky BusinessRepresenting Buyers and Sellers in

California

Edwin Estes Jr.Richardson, Harman & Ober, P.C.

TIGAR Legal Counsel

#1. Misunderstanding Agency

The Broker is always the Agent of the Principal (Seller or Buyer)

Listing Agent: Seller’s Agent or Dual Agent

Selling Agent: Buyer’s Agent or Dual Agent

Don’t use “Buyer’s/Seller’s Agent” until after Confirmation in the RPA-CA

#2. All Compensation Agreements Must be in Writing

Listing Agreements with the Seller(s)

Representation Agreements with the Buyer(s)

Compensation Agreements between Brokers and their Associate Licensees

For Sale By Owner Compensation

#3. Trust Fund Handling (RPA-CA)Default Language

Buyer to Deliver Deposit to Escrow within 3 Business Days following Acceptance

Elected Language

Buyer gives Deposit to Agent procuring the Offer to be held uncashed until Acceptance…

#4. Failure to InspectAll Habitable RoomsAll Accessible AreasSurrounding Areas of the PropertyNot Included

System OperationsNon VisualInaccessible AreasOff Site Areas

#5. Failure to Disclose

All Material FactsThose that are statutorily requiredThose that may affect the value of the propertyThose that might cause the Buyer to reconsider

purchasing the property

Explaining the Significance of an Item

#6. Documenting Disclosures

Transfer Disclosure Statement

Agent’s Visual Inspection Disclosure

CAR Addendum

#7. Misunderstanding the RPA-CA

What to put in the Blanks

What the Paragraphs Say

How the Paragraphs Interrelate with Each Other

Following the Time Frames

#8. Making Representations

Only State What You Know to be a Fact

Attribute to the Source

Never be the Expert

#9. Giving Assurances

Deal with Objections or Concerns Head On; Don’t Dance around It:

“Oh, it will be alright”

“I am sure this will not be a problem”

“This is nothing to worry about”

# 10. Document in Writing

Place a Note Sheet in your Transaction FileDate each EntryList the party

Copy e-mails to a Transaction Folder

Save everything for at least 3 years

Questions & Answers