Huh? I’m Confused…

Written by Walter Boomsma, instructor. See his blog.

Huh?One section of the Maine Real Estate Brokerage Act (Title 32, Chapter 114) that causes confusion in almost every class is  §13251-A, Conflict of Interest.

“A real estate broker or associate broker may not knowingly provide or offer an appraisal or opinion of market value, as set forth in section 14004, on real estate in a transaction where the broker or associate broker, or any other licensee licensed with the agency, is to receive a fee on that transaction.”

On first glance it would appear this prevents a licensee from completing an opinion of market value for listing clients since the licensee clearly expects to receive a fee (commission) when the property is sold.

In order to fully understand §13251, one must look at the body of the law including §14004 as applies to appraisers and be clear on client relationships. The intent of this law is prevent a licensee from completing an opinion of value for compensation on a property that is under contract within the company—the important words here are “on that transaction.” The best example of when this would apply is a short sale. Let’s assume that the listing agent works for our company and a buyer’s agent presents an offer that would make the transaction a short sale. In this example, the lender might well hire another licensee to complete a BPO to help them decide whether or not to agree to the short sale price. §13251 would prevent a licensee within our company from completing that BPO (Broker’s Price Opinion).

You can perhaps see how this could/would become a conflict of interest since our company will receive a fee if and when the transaction closes. The licensee performing that BPO would be working for the lender–the lender is neither the buyer or the seller and wants an objective opinion of value absent any influence from either the buyer or the seller or their agents.

Advertisements
Posted in Walter Boomsma. Comments Off on Huh? I’m Confused…
%d bloggers like this: