Can A Licensed Real Estate Agent Represent Themself At A Foreclosure?
There are many scenarios where someone may want the support of a licensed real estate broker. When an investor approaches you about buying a house or a commercial property, it is likely that you will offer assistance. In most cases, you’d have an expert who handles all the paper work and acts as your representative. However, some investors have become savvy to unscrupulous agents that act as their own personal representatives. Is it right for an inexperienced individual to serve as their own representation?
First and foremost, it’s important to remember that the Franchise Disclosure Document (FDD) is there for a reason. It allows other people to determine if you are actually licensed. Therefore, when you give someone your FDD, they can make sure that you’re licensed. However, is it unethical for an inexperienced person to sign it? Can they actually represent themselves on behalf of you?
The short answer is no. There is nothing wrong with permitting an unlicensed agent to represent you. In fact, it is not against the law for an inexperienced real estate agent to do so either. The problem arises from the fact that unscrupulous agents will attempt to take advantage of this situation. They will make false promises and try to convince you that you need to sign over the deed of your home or property without your approval.
What you will need to realize is that if you are genuinely licensed, you can have anybody you want to represent you sign the FDD. The question then becomes, why would you need an unlicensed agent? If you are acting as your own realtor, you need to be certain you have the license. Otherwise, you are running the risk of being charged with securities fraud. This can carry some rather serious penalties.
One reason that an unlicensed real estate agent might represent themselves in a transaction is because they don’t really know much about it. They may have attended a short class, but the majority of their knowledge comes from working for the agency. This is fine if you’re only looking around town. For larger transactions, you might need to work with an agent who has some real experience in real estate. If this isn’t true though, it’s always best to work with a person who’s licensed.
Another reason that can allow an unlicensed real estate agent to represent themselves in a trade is because they just don’t care. It may seem like a great idea to sign on the dotted line without actually having done your own research. This is understandable, especially for buyers that are ready to sell. However, agents who represent themselves in these situations often do so out of fear of being sued.
Finally, some agents represent themselves because they believe they can get away with it. If they represent themselves and a seller buys the property, they might believe they can skip the paperwork. They may believe they can skip hiring a real estate lawyer or realtor. While these individuals certainly have the right to behave in this fashion, they often put their clients in a situation that forces them to hire a realtor and legal counsel.
As you can see, there are lots of reasons that may make someone self-represent and among the most common reasons is because they do not really know much about real estate law. When they think they do, they may not be aware of certain loopholes in the code. Therefore, it is very important that licensed realtors spend the time required to become educated. The last thing you want is to get a licensed real estate agent to sign a deed in lieu of foreclosure, just to find out that they had been incorrectly representing themselves. This can lead to costly mistakes.