Practice of Real Estate, Disclosures, and Fair Housing
Listing relationships and competition
An exclusive right to sell earns a commission whoever procures the buyer; an exclusive agency carves out the seller's own buyer; an open listing is non-exclusive. Net listings are prohibited or strongly discouraged. Commissions are always negotiable, and discussing standard rates with a competitor creates antitrust exposure (price fixing, group boycotts, market allocation).
Required disclosures
Agency relationship in writing at the required point in the transaction; a seller's property condition disclosure for residential resales with statutory exemptions; lead-based paint disclosure for pre-1978 housing (pamphlet, ten-day inspection right, signed acknowledgment); and material facts affecting value or desirability. A broker must never accept a seller's instruction to conceal. RESPA bars kickbacks and unearned referral fees.
Advertising and conduct
Advertising must name the brokerage, must not be false or misleading, must not imply a listing that does not exist, and must comply with Do Not Call and anti-spam rules. Social media posts follow the same standards as print.
Fair housing
Federal protected classes: race, color, religion, sex, national origin, familial status, and disability. Prohibited acts include refusing to show or rent, differing terms, steering, blockbusting, redlining, panic selling, and discriminatory advertising. Disability requires reasonable accommodation (policies) and reasonable modification (physical changes). Exemptions are narrow - some owner-occupied single-family sales made without a brokerage, and qualified senior housing. An agent who follows a client's discriminatory instruction is still liable.
Traps
- 'No children' or 'adults only' violates familial status.
- Familial status is not marital status.
- The Fair Housing Act is not the ADA; the ADA covers public accommodations.
Rule of thumb
If an ad describes the ideal occupant instead of the property, rewrite it.
Worked example
An ad reads 'Quiet street, perfect for a young couple starting out.' A family with children complains. The wording expresses a preference based on familial status and must be withdrawn, regardless of the seller's intent.