Hello all.
I’m leading a discussion here on AMT and to be used in our CE course on Agency and the Use of Social Media at the Arizona School of Real Estate & Business.
Please leave your comment(s) below.
One of the questions asked is: What is the greatest agency-specific risk to a real estate professional using social media (i.e. blogs, Q&A forums, Twitter, etc.)?
We are discussing what actions or implications of a real estate professional using social media could lead to implied agency and the resulting consequences.
Food for Thought:
Implied Agency
- An actual agency created by acts of a principal that reasonably imply an intention to create an agency relationship.
- It may be implied by the conduct of the parties and no formal agreement is necessary.
- Created by mutual assent.
- The existence of an agency relationship is the determination of a court makes after considering all of the circumstances.
Hayward v. Graham, 104 Ariz. 103, 449 p. 2d 31 (1968)
An implied agency must be based on facts such as to imply an intention to create the agency, and the implication must arise from a natural and reasonable, and not from a forced, strained, or distorted, construction of them. They must lead to the reasonable conclusion that mutual assent exists, and be such as naturally lead another to believe in and to rely on the agency.
Lastly, consider the following examples.
http://www.trulia.com/voices/Home_Buying/Implied_Agency_Do_we_have_a_buyer_s_agent_now_-13159
Thanks again for your comments.
Steve Lines
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The first thing that popped into my mind would be…
Blog comments.
If someone comments on a post you wrote about something, and you reply… I could see how someone could make an argument that there would be implied agency there.
Wait.
Maybe they could make the same argument for a discussion that you had on Twitter.
Or a message board.
Ok, so I guess my answer is…
“If you communicate through a keyboard to a potential client, be very, very careful about implied agency.”
Oh, and I should make a note that I am not the expert in this stuff — and these are just my thoughts early on a Saturday morning.
Justin
My opinion? Well I am not going to address your question directly, but more of the idea of implied agency as a whole and I think implied agency is complete bull shit. If I walk into Staples and ask about computers and Looking at a HP 45x laptop, then walk into Best Buy and buy a HP 45x laptop, does the Staples sales clerk get a commission?
You want agency? Then get a written exclusive agency. Any agent who cannot close the deal then bitches and complains should go find a new career. Our job is to help and serve people, if we do not get them across the finish line then we shouldnt be complaining.
And let me clarify, that being said one of the first things I always say is “are you working with another realtor” and if they say yes I say then you need to talk to them.
I’m pretty much in Dean’s camp. Implied agency is ridiculous. My clients know damn well when I’m representing them, and we don’t even use buyer broker agreements. *Technically* because we don’t have a written agreement with our buyers we have an implied agency relationship. That’s a risk *I* take. I’m completely confident my buyers understand (and believe in) our relationship. It’s the agents going to arbitration, boards and courts to get an implied agency ruling that sickens me.
The courts can butt in and proclaim an implied agency exists. I don’t think it’s the *agent* that needs to be concerned with it, I think it’s the *consumer*. Should a consumer “engage” with an agent via social media avenues, then it’s possible some agent out there could make a claim of implied agency and the courts could agree, thereby screwing the consumer out of the representation they really want.
I almost feel sorry for agents that have to resort to reeling clients in via pleas for implied agency, or agents who whine about “procuring cause” and think they are owed a commission simply because they unlocked a door and showed a home.
I almost feel sorry for them. I also want to punch them.
That city-data thread makes me sick. An agent exchanges a few emails with someone then cries when they want to use another agent. And threatens to sue them for commissions. Are you kidding me? That agent didn’t come remotely close to entering into an agent / client relationship.
Do your job, educate your clients, and you won’t have to grovel in front of boards, arbitrators or judges to get paid.
I hear you on the pathetic approach whiners take to get paid, but what about the other side of the coin? What about liability for something you say in a public forum – somehow an implied agency relationship develops online where professional and personal comments are not so well separated as they might be in person…many of my clients are Facebook friends – or even more of a stretch…what if someone is following me on Twitter? I may not even know who they are, but could they come after me at some point and sue me for a tweet?
I think Jay and Dean covered the agent claiming implied agency pretty well.
From the other side of the coin, as it sounds like Justin and Kristin were saying, what about when no agency exists, but the customer/client believes there to be an implied agency?
I think Jay does a pretty good job in his blog posts and comments (where the issue might be raised) in stating something to the effect of: “I am not a lawyer/CPA/whale autopsy technician; if you have questions, please consult with professional in that field…”; A disclaimer like that on any posting (where appropriate) should go a long way to negating any claims of implied agency against a licensee.
And as Dean said, in talking specifically about real estate, make it clear that you are not assuming an implied agency by asking them if they are working with another Realtor. If they say ‘yes’, direct them back to their Realtor for whatever they need. Find a nice way to say “I don’t represent you”, make it clear, and there should be no misunderstandings (on the converse, if they say ‘yes… but…’ and give you a reason why they may not like working with their current agent, ask them to sign a BBA, and boom- you’re covered. No implied agency- at least on your part- to worry about, both the agent and the client now have a written agreement, and you, the agent, now have another client. If they won’t sign it, see step 1- go to your agent.).
Facebook, Twitter, etc. should be no different- if you want to ask a question, feel free, but keep in mind that this is only general advice; until we mutually agree to a specific relationship, the only implied agency is none. If you want anything more specific, then expect there to be some sort of paper trail, be it a Listing Agreement or an email trail- something to show that I was talking specifically to YOU. Just because I post on Twitter “I think Scottsdale’s a great place to live, and there’s never been a better time to buy a home there!” does not imply that:
A) I am now working for you as a Buyers’ Agent
B) I told you to buy a home in Scottsdale
C) I should be considered in violation of my fiduciary responsibility if you buy a home in Scottsdale from another agent and it turns into the Money Pit (Your buyers’ agent may have some responsibility in that case, but not me)
Might someone of a particularly litigious nature try? Oh, sure- it’s easy to sue just about anyone for just about anything these days, but that’s where common sense should come into play. Without some written agreement or trail (email, DM, blog comment, text message, call log, etc.), don’t assume I’m advising you specifically in any capacity. You might as well treat any tweet or Facebook posting as something you overheard me telling someone else in a bar… because that’s pretty much what it is.
That may be some of my still wet behind the ears outlook, but that’s the way I see it.
That is a really good question and just to avoid any misunderstanding my comment is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.
Now that this is out of the way here is what I think.
Not to sound like a lawyer, but it depends. Contracts or agreements within implied agency relationships are very hard to enforce. That is why we have Arizona’s statutes of fraud. Everything has to be in writing. An implied agency arises out of the conduct of the parties and their actions. That Trulia-Voices-Question is a classic example.. do we really know what each party said over the phone? The City-Data.com thread is not so clear cut, who knows what was said in those emails. For all we know there could have been an exchange of three factors necessary to create a contract: 1) an offer, 2) acceptance, and 3) consideration. And if I am not mistaken, sending an confirmation email can be an acceptance. It does not need to be with ink of both parties on the same piece of paper. Depending on what is in the emails of the City-Data.com example, the real estate broker of that agent might have a chance to convince a judge or a jury that there was an agency – and NO I a not saying that that would be the right thing to do from a customer relationship stand-point of the real estate broker and totally agree with Dean, Jay, Kristin and Dan.
Moving onto the Web 2.0, social media and the potential agency problems arising communicating via the Internet, it would be prudent to be vigilant and protect yourself as Justin suggests.
By all means I am no expert, however what is being said (typed on a keyboard) or uploaded (photos, sound and video) is for ever on web. So when ever you engage in conversation on the web, think twice before you hit the send-button. It would also be a good idea implementing a comment policy on your blog and using disclaimers in your replies (when necessary). The bottom line is – use common sense – otherwise the WayBack Machine is not going to be your friend.
Now I have to go check with my attorney if the 99% commission split Justin offered me over at Academy is still up for grabs…