DANGER! WILL ROBINSON” Open House Warning!!

One of things that a one-person office faces,  is where do I pick up new buyers if I don’t have any listings for sign calls or open house?   I recently heard an agent say that he doesn’t worry about that because he just calls one of his friends from a large office and they let him hold one of theirs open.  He's got so many,  the agent said, he can't hold them all open this weekend.  Another agent piped up and said he has let other agents host his open houses as well.   All I can say as a real estate expert witness,  who has seen lots of litigation against agents,  “Danger, Will Robinson. Danger.”

So,  what is the big deal?   Why is this a problem.?  First of all,  your seller,  by law,  is liable for any mistake that an agent representing them makes.  So,  who is liable if the agent,  holding the open house,  misrepresents something to a buyer but they are from another Brokerage office.  Or what if the agent holding the house open,  picks up the buyer and represents them as the buyer’s agent?  Are they a dual agent?  Aren’t they representing the seller when they were holding the house open.  Are they a sub-agent of the listing agent?  And,  if they are a dual agent,  what company logo goes on your flyer.  I can tell you that if the buyer decides to sue someone,  a clever attorney will make a circus out of this arrangement.

I am not sure of the answer but I can tell you in my legal work as an expert in litigation cases,  I think that a case could easily be made that the agent holding the house open is representing the seller,  thus is taking on liability for the seller’s representations and the house,  which they really know NOTHING about.  Can't you just imagine a seller,  during the trial (I love to say that),  testifying that he never met the agent holding the house open and he couldn't imagine where the agent got the information that he told to the buyer.

Also,  I think can see how a smart attorney could bring the agent holding the house open and their brokerage into the case. Imagine the surprise that the broker would have when they got sued for a property they don’t even have listed.   I also wonder if this might somehow give a reason for the Listing agent or the other agent’s E/O carriers to not be willing to pay the claim.  Insurance companies will always look for ways or an excuse not to cover someone.

I know that many things in life start with the best of intentions but they can have major negative consequences.  Before you allow this practice on your listings, have your broker run this by your company attorney.