Common Questions

• Authorized Signatures

  Can brokers sign on behalf of a client? 

  Agents can if authorized by the principal. The other side should ask for written authorization. No contract for land is enforceable unless in writing and signed by both parties.

• Contracts

  Owner may finance, but the buyers may be illegal aliens. What type of information can I request?
  

  Parties are free to contract and the seller may ask questions to protect themselves. Under Title 60, Sec. 121, aliens cannot own land but an exception under Sec. 122 is if they intend to establish residence.You can ask questions since they gave inconsistent answers re: SS #'s.

  
  

  If the buyer fails to deliver Earnest Money, what is status of contract?

  The buyer has already breached and contract is null and void unless parties want to allow late delivery of funds.

  
  

  I had a seller who was an elderly lady who continues to change her mind about selling her house and now wants to back out of the contract. What happens and am I in trouble?     

  You should be fine as long as the client was coherent when she contracted with you. The seller can back out, but will have to pay for damages because she is breaching contract.

  
  

  I had a listing and the seller hired an auctioneer to try to auction the property. The auction contract, in fine print, states that they get a percentage if the property is sold in a certain time after auction. Is this enforceable?

  It is likely enforceable against whomever they contracted with; a valid defense is if they told the seller something different than what the contract said.

  
  

  Owner sold home to first buyer for contract for deed. This buyer is having trouble making payments, so the owner wants to sell to second buyer. Who is the seller here and is this okay?

  The owner still owns the home, so they are the seller. Could be a problem if first buyer claims an equitable interest in property as the owner would have to foreclose against the first buyer before a good title could be transferred to second buyer.

  
  

  Buyer and Seller are in contract. The house did not appraise, but came in about $50,000 under. The buyer approved for that amount. Seller offered to come down $50,000 to get deal done, but now the buyer is walking away.

  This could be considered material change in condition. If Earnest Money has not gone hard yet, the buyer could get it back. A judge would ultimately decide if this change in value is equivalent to a material change.

• Disclosure

  I am a member of local board that wants us to submit copies of all listing agreements. Can we do that ethically? Seems like that would be revealing info about our clients.
  

  NAR Standards of Practice 1-9 says you can't disclose confidential information about your client. I'm not sure your commission is confidential information, but if you believe it is, black that part out on the copy you submit. NAR doesn't define "confidential information."

  
  

  Should I disclose drilling on the edge of land?        

  If it was on the land or affects the land, you should disclose.  You may want to err on the side of caution, but I don’t believe this disclosure is required by law.

• Earnest Money

  Can the buyer and seller agree to any amount of earnest money?      

  Buyer and seller can agree to any amount of earnest money. However, in the event damages are sustained in a breach of the contract, Oklahoma state law limits the payment to five percent of the purchase price.

  
  

  Is there a minimum amount of earnest money required?

  No, consideration is the purchase price. Earnest money is just liquidated damages.

  
  

  Can a licensee/broker loan a buyer the amount for an earnest money deposit?

  No. Oklahoma Statutes Title 59, Section 858-312(16) and (22) state that you cannot do this.

  
  

  Buyer had me make offers on a house. Buyer then hired another REALTOR® and purchased another home without me. The buyer is upset with me because I won’t release earnest money (seller from first home won’t sign release).

  Tell the buyer you can’t release earnest money unless the seller also agrees. Otherwise, the buyer needs to file civil action (interpleader) to get money back. You are allowed to pursue a breach of contract claim against the buyer for breaching your Buyer/Broker agreement.

• Landlord/Tenant

  Landlord and Tenant have agreed for Tenant to move out early. Can Landlord charge rent for time Tenant is there even if in process of moving out?

  Yes. The landlord can recover damages and any time that this tenant is preventing the landlord from renting to another tenant is considered damages.

• Miscellaneous

  My agent was contacted by a seller. That seller is now represented by a different broker. Can my agent talk to the seller about future representation?
  

  Yes, NAR Standards of Practice 16-6 allows for agent to discuss future agreements or to even enter into an agreement now that will take place in the future, once the seller's current agreements have expired.

  
  

  Buyer's inspections show house is on a city easement. Is this a title problem? What do we do now?

  Under the standard OREC contract, that is considered title evidence. Buyer notifies Seller and gives Seller opportunity to cure. If Seller cannot cure, Buyer takes earnest money and walks away.

  
  

  I need to sell a modular house; the seller wants to keep the land, so the house is to be moved. How do I list that? Would it be as a mobile home?   

  I don’t think so since this is not a mobile home. It would be listed as usual, but make very clear and blatant disclaimers that the sale does not include land and will necessitate the house to be moved, and which party pays for the move. 

  
  

  My client bought a large amount of homes in a new area. Can I advertise that I sold them even though I did not list them, but brought the buyer to the table?     

  Under Standards of Practice 12-7 of the National Association of REALTORS® Code of Ethics, only listing and selling brokers may claim to have “sold” the property.  

  
  

  I want to charge a closing fee of $60 at closing. Is this OK?

  There shouldn’t be a problem with this as long as the client knows of the fee ahead of time and agrees to pay it.

  
  

  Seller wants to stay in house 30 days after closing. I am drafting an addendum to the real estate contract. If there is no rent being paid, what should I put in the addendum?

  Buyer will want a liquidated damages clause in case the seller does not move out in time.

  
  

  Who can advertise “selling” a property?  All REALTORS® involved?

  According to NAR Code of Ethics, Standard of Practice 12-7, “Only REALTORS® who participated in the transaction as the listing broker or cooperative broker (selling broker) may claim to have ‘sold’ the property.”

  
  

  I know of a person, not licensed, that has a website with land he is selling. Do I sue him or is this something the Oklahoma Real Estate Commission (OREC) would handle?

  In order to pursue an individual cause of action against this person, you would have to show this person committed a tort or breach of contract against you, which resulted in damages. The non-licensed person is doing something unlawful if they are selling land they do not own and are not licensed to do so, so an agency needs to bring disciplinary action. I recommend calling OREC and speaking to one of their investigators.

  
  

  I have a listing and know that the assessor’s square footage is wrong. How do I list?

  There is no magic language; attribute the assessor as the source of square footage it claims. I would recommend, since you know it is wrong, adding that the seller believes square footage is closer to ___, or have it surveyed for a more accurate number.

  Editor’s Note: OAR worked to successfully amend the laws relating to square footage disclosure earlier this year. The new law in Section 858-515 of Title 59 clarifies that licensees are not required to provide any square footage or measurement information in a transaction, and further specifies that if a licensee does provide any measurement information, that it does not constitute a warranty or guarantee. If the licensee is providing information from a county assessor, he is not liable for any damages so long as he identifies the source. If you know the information from the assessor is incorrect, you have a couple of different options:  list the property using one of the other sources outlined in the new law, which include an appraisal prepared by a licensed appraiser or a builder’s plan used to construct or market the property. If an appraisal is not available, you could contact a local appraiser to see if they provide “measurement only” services. Many appraisers throughout the state offer this service at a lesser cost than a complete appraisal. As always, the buyers are free to independently verify measurement information if they choose to do so.

  For future reference, OAR has developed a Square Footage Acknowledgement form that helps further clarify the issues that can arise when dealing with measurement information. Although use of this form is not mandatory, we encourage our members to use this form especially in transactions where square footage questions may arise.

• Offers

  Does a seller have to respond to offers in any certain order? Can he accept an offer even if that offer was not the first? 

  The seller may accept an offer at any time until it is either rescinded/revoked or expires. There is no duty for the seller to respond in any certain order.  There is no contract until an offer is accepted.  

• Procuring Cause

  Is there a rule of thumb for what makes a procuring cause?     

  Not really; each case is fact specific. A judge would look at a handful of facts between relationships with the parties and services performed and make a decision.

• Short Sales

  Buyer made offer on house in foreclosure (short sale). Seller’s agent said hecollects offers and gives them to lender for approval all at once. Is that allowable?

  Seller’s agent has a duty to timely report offers UNLESS lender asks for otherwise. Buyer can withdraw offer at any time prior to acceptance.

  
  

  I am trying to buy out of a short sale, but can’t get an answer from the lender. What can I do?

  You can likely withdraw the offer.  If it is set for sheriff’s sale, you can bid there; bidding starts at 2/3 the appraised value.

• Commissions

  A licensee had a listing with her former employer and wants commission off of it. How can she get it?

  Write a letter stating why she should be paid commission. She can also bring suit on a quantum meruit theory (recovery for work performed). These matters are fact specific. She will have burden of proof and needs to show she was the cause for the deal coming together.