Jim Valentine on Real Estate
Real estate is regulated by the Real Estate Division of the Department of Business and Industry in Nevada. The RED qualifies and approves of licensees to sell or manage real estate as well as providing many guidelines controlling the manner in which the business is conducted.
Much of the foundation for the regulations came from the National Association of Realtors Code of Ethics. Recent regulations are established primarily for the protection of the consumers, buyers and sellers.
One form required by the RED is the duties owed form, last revised Oct. 5, 2023. It is a disclosure form advising buyers, sellers, tenants and landlords what their agency relationship is with the agent that they are working with.
Agents don’t actually need to have an agency relationship with a customer, but the fact that they don’t must be disclosed. This form does not create an agency relationship, it merely discloses it.
An advisory opinion (15-01) addresses the duties owed form in a referral situation. Real estate agents often refer customers to one another. A fee is usually paid, but not always, but whether or not a fee is being paid to an agent has no bearing on the agency relationship.
If an agent is imply giving a referral to another agent and not acting as an agent for the party in a transaction, there is no requirement for a duties owed form. Another state form is the open range disclosure, used to disclose open range adjacent to a home or improved lot. This form gets recorded at the end of the escrow, or after it closes.
The delay is because escrows sometimes don’t close, and we don’t want to clutter up the title. Because of that delay agents often wait until the end of the escrow to have the seller sign it, but that is not the correct procedure. A RED position statement dated July 1, 2010, says that “Before a purchaser signs a sales agreement, the seller must provide the mandated disclosure document to a potential purchaser.”
It further says, “If the purchaser does not sign (refuses to sign) and return the “original” disclosure form the seller cannot execute the sales agreement.” This paper has slipped through the proverbial cracks for many years. Get it done up front.
The real estate division also took up the matter of computing time. Time is involved in all aspects of a real estate transaction. What becomes tricky is that sometimes it is “business” days and other times it is “calendar” days.
Then there are “days,” not specified either way. If it is less than 11 days and does not specify how to compute the time period, Nevada Rule of Civil Procedure 6(a) requires excluding Saturdays, Sundays and non-judicial days.
That equates to it being a “business” day computation. An interesting form from the RED is the authorization to negotiate directly with seller. This is used when the listing agent is not providing a complete package of services.
They promote the property but are not involved with the negotiations. The seller usually thinks they are saving money, but they are negotiating with a professional negotiator on their own. There are many forms/documents in a real estate transaction.
Some are created by the real estate division, others by the local multiple listing service or board of realtors while others yet are generated by individual offices or franchises.
It is important to understand what it is you are signing, even the fine print. After all, that is where the Teufel lurks. Most are designed to protect you, but used improperly could have the opposite effect.
As your agent when you don’t understand something. The only stupid question is the one unasked so be sure you are clear what it is you are agreeing to do.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Gold Carson Valley, 775-781-3704. dpwtigers@hotmail.com