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There’s a lot of confusion around the particulars of the National Association of Realtors (NAR) commission lawsuit settlement and the resulting business practice changes. Compliance expert Summer Goralik is here to help clear up some of the looming questions so that we can move forward together as an industry.
Read the entire series.
This week’s question
Will agents actually call you back?
Compliance expert answer
As the smoke begins to lift in the real estate industry — not to suggest that all the fires have been extinguished — but as Realtors have started adapting to and implementing the changes arising from the National Association of Realtors’ (NAR) proposed settlement, I found this week’s question particularly curious.
Among the many concerns surrounding the new practice rules for Realtors, which took effect in August, it’s surprising that this question emerged from the array of issues practitioners are discussing. Are Realtors genuinely worried that agents won’t return phone calls?
Before unpacking this unexpected question, I’d like to note that it’s a refreshing detour for me, as it provides an opportunity to weigh in on something not entirely related to the NAR proposed settlement. In other words, this question, along with the underlying concern, seems to go beyond the current practice changes on the table.
In fact, it might even be a subtle critique of agent behavior that some Realtors have either witnessed or exhibited within the industry.
To begin, let’s clarify the context of this question, at least as I understand it: Now that offers of compensation are prohibited from being advertised, offered or facilitated through the multiple listing service (MLS), buyer agents may need to contact listing agents to seek information regarding potential brokerage compensation. But what happens if listing agents do not respond to or return those calls or inquiries?
First, let me clear the air before providing feedback: When I think of bad agent behavior, unreturned phone calls or nonresponsive agents are not top of mind.
As a former California Department of Real Estate investigator, when I hear complaints about real estate agents, my mind tends to focus on the most egregious offenses I’ve witnessed in my career, such as fraud, misrepresentation and deceit.
But if we zoom out a bit and look at the bigger picture, non-compliance or unacceptable conduct in the real estate field comes in many forms. There is a whole spectrum of licensed behavior and activities that, while not always intentionally unlawful, surely fall below the standard of care required of real estate professionals. Namely, they fail to meet the level of skill, care and competence that a reasonably prudent real estate licensee would exercise under similar circumstances.
Now, let’s return to the question, which increasingly feels like an allegation in disguise. If a listing agent, who owes a fiduciary duty to their seller and is entrusted with acting in their best interest, fails to return or address another agent’s phone call or inquiry about their client’s property, this is simply unprofessional.
Not only does it paint an unflattering picture of the listing agent, but one could easily argue that repeated behavior like this falls below the standard of practice and care. Furthermore, the homeseller would likely be upset to learn that their agent is failing to respond to potential interest in their property.
One could take this negligence even further. What if a listing agent who has found their own buyer and stands to benefit from a dual agency arrangement fails to return phone calls from other agents with interested clients? This is not only unethical and below the standard of care, but it is also a breach of fiduciary duty. Actually, this type of scenario could land the agent in regulatory trouble with the state department of real estate or open them up to potential civil litigation.
So, we know this behavior cannot stand, and there should be no disagreement here. Admittedly, while I have heard complaints about unresponsive agents from licensees in different capacities, working as a compliance consultant, standard-of-care expert, and former DRE investigator, I would still like to believe this type of conduct is not commonplace.
Put simply, there are more good agents than unethical ones, and these agents are committed to their clients and to doing the right thing.
Speaking of good agents, it’s worth mentioning that it is extremely important for real estate practitioners to document their activities and efforts at all times. Agents can protect themselves and maintain compliance by keeping thorough records of their interactions and decisions. This includes documenting calls, emails, and meetings with clients, buyers, and other agents, ensuring they reflect the agent’s adherence to their fiduciary duties and the standard of care, especially under the evolving regulatory landscape.
For example, if a listing agent receives five phone calls or emails on any given day about their listing, they should keep a record of each correspondence. This not only evidences the interest in the property — which should be shared with the seller — but also documents the agent’s activities. Depending on the situation, this documentation could protect the agent from any potential allegations of inaction, unethical practices or unlawful activities.
To bring this discussion back into focus and against the backdrop of the NAR settlement, let’s simplify the issue. To any Realtors concerned that their counterparts may not return phone calls: Do not let another agent’s unresponsiveness or unprofessionalism stand in your way. It shouldn’t dictate your behavior or deter your efforts. You still have a job to do, and you need to get it done.
Put another way, even if a buyer’s agent, acting on their client’s direction, is trying to acquire information about brokerage compensation from a listing agent and is unsuccessful, this does not prevent the agent from doing what is necessary to represent their client’s interests.
Regardless of whether compensation terms are confirmed with the listing agent beforehand, if a homebuyer wants to request that the seller cover their brokerage compensation, the buyer’s agent should include those terms in the offer.
It’s possible that even responsive listing agents may not confirm this information until a written offer is presented. As I discussed in my post a couple of weeks ago, new considerations surrounding brokerage compensation and the decoupling of commissions are now in play.
Some listing agents, following their client’s instructions, may choose not to reveal any details about potential brokerage compensation upfront, instead waiting to negotiate after receiving offers.
Again, no matter the circumstances, buyer agents must fulfill their commitments to their clients. Like listing agents, buyer agents should document everything in writing, including phone calls and inquiries made in connection with any property.
If they encounter an agent failing to do their job, they should document that as well. This not only provides evidence of the buyer agent’s actions but could also be used in the event of any impropriety or non-compliance by the listing agent.
It’s also worth noting that buyer agents can report a nonresponsive listing agent to their responsible broker. While this might seem burdensome, it often triggers a response. These efforts should be documented by both the buyer’s agent and the buyer’s broker, as well as the listing broker.
Getting back to the crux of this question: Even though I understand the concern raised — especially given the recent changes to commission rules — the new practice guidelines have not altered the fundamental duties owed by agents to their clients. Agents are still required to act as fiduciaries — honestly, fairly, diligently and in good faith.
If agents do not return calls, fail to respond to potential interest in their listed properties, or act contrary to their client’s instructions, this behavior could lead to a host of problems. As a compliance consultant, I can tell you that “problems” can encompass many issues — and they typically do not result in positive outcomes.
In closing, imagine every client, property, and transaction as its own unique story. A good story is one you want to remember — where the agent expertly guides their clients to the happy ending of buying their dream home.
A bad story, on the other hand, is one you can’t escape, usually marked by agent missteps and disappointment.
From the first page to the last, the narrative must be straightforward, legal and professional. It should reflect the agent’s commitment to fulfilling their fiduciary duties and demonstrate that the standard of care was met at every step.
If the story has plot holes — gaps in communication, unexpected twists, unhappy characters or a disastrous ending — it could be retold again and again through complaints to brokers, the state department of real estate or in court. And once that story is out there, it’s hard to rewrite.
In short, if agents don’t return phone calls or inquiries, they could face much bigger problems than just frustrated colleagues. Fortunately, while this concern about agent conduct is valid, it is not the norm and hopefully will not become more prevalent in the NAR settlement era.
Moreover, with all eyes on Realtors right now, it’s especially important for agents not only to meet their baseline duties to clients but also to ensure compliance, communication and professionalism in every aspect of their practice.
Editor’s note: Licensed real estate agents should always check with their responsible brokers for guidance, direction and policy regarding the new practice changes, and licensed real estate brokers would be wise to consult with a licensed attorney for legal clarification and support.
The opinions, suggestions or recommendations contained in this discussion are based on Summer Goralik’s experience working for, and knowledge of the laws enforced by, the California Department of Real Estate and must not be considered legal advice or relied upon as legal advice. You should consult with your brokerage, and/or appropriate legal counsel in your jurisdiction, for further clarification.
Summer Goralik is a real estate compliance consultant and former CA DRE Investigator in Huntington Beach, California. Connect with her on LinkedIn.
