Cohousing-L Mailing List: Re: Communication between prospective buyers and community members?

[Sophie Rubin (yophiest]

I am not an attorney nor a real estate agent but I have been looking into
this, I did just sell a house in ca, am looking at buying new property
currently, and am training for my broker’s license in California.

It is not illegal or “against the rules”  for prospective community members
to talk with current community members. Agents say it is all the time,
though, because it is in the best interest of agents to protect their
commission by limiting communication between buyer and seller. The number
of contracts that actually SAY you can’t? Probably close to 0.

I would say you should go so far as to threaten to fire any agent that
suggests you can’t communicate, because it’s blocking principal parties in
the transaction from doing their own due diligence. I would also ask the
agent exactly *what* they think is “not allowed” - who doesn’t allow it and
why?

Note that there IS a new, federal law in place as of Aug 17 regarding real
estate transactions. The law itself is about disclosure requirements for
*commissions*, particularly the buyer’s agent commission.

The way real estate agents are spinning it is to say that it is “illegal
for them to show a property without a signed contract.” That’s so they can
cover their butts by saying “we agreed on a commission in advance - it was
negotiated/disclosed in writing and not hidden so we followed the law.”

In practice I find this is complicating things even worse than before (at
least for the time being). Now agents have additional cover to say “well we
know the other party signed a contract and we don’t know what the other
party’s contract says - it could prohibit it” or some other such bullshit.
AND you should expect that no one will be viewing units from the general
public without a signed buyer’s agent contract.

PSA FOR COMMUNITIES: IF you hire a seller’s agent, make sure that they are
willing and able to show units to unrepresented potential buyers!! Going to
see a unit is hard, now, unless there is an open house, because seller’s
agents will say they can’t dual represent so they can’t show due to a
conflict of interest and buyer’s agents will say they can’t show you a unit
until you’ve signed a contract and agreed to a commission!!

And one final speculation: agents could be concerned with running afoul of
fair housing law. I think there is a fear that if sellers can talk to
prospective buyers and the buyers belong to a protected class, that if the
buyers are then not chosen after providing an offer, they could use
discussions with the sellers or the community as the basis for a lawsuit
claiming discrimination.

In summation: agents are extremely focused on two things: (1) closing the
sale as quickly and easily as possible and (2) covering their asses. Both
of these goals are more easily met when there is less communication between
parties. So of course they will say it if they can get away with it!!