Under SC Code 40-57-370 a real estate agent is required to provide a meaningful explanation of agency at the first practical opportunity. But what does that mean? How do you determine what is the first practical opportunity? Is there a triggering event? Are you doing this correctly? Maybe not.
It seems that a lot of real estate agents wait too long to provide the meaningful explanation of agency. So in this episode we continue our review of the statute and learn how and when you must deliver your meaningful explanation of agency. You will learn how to do this the correct way which should help you convince more consumers to enter into agency with you.
Also, in my Quick Take I discuss what the the NCAA v. Alston case means to South Carolina and Clemson sports and of course, Gary's Good News Only!
Enjoy and PLEASE TELL OTHER REAL ESTATE AGENTS ABOUT THIS PODCAST!!!!
Dirt with Gary Becker in South Carolina's only podcast dedicated to the real estate agents credit. And Greetings. Welcome back to another episode of vicious dirt. I'm your irreverent and very opinionated, but rarely wrong host Gary pick brand and I'm coming to you from Blair Cato in downtown Columbia, South Carolina. hope everyone enjoyed the Fourth of July weekend, and ready to get back into learning about real estate. Now this week, we're going to continue our examination of Section 4057 370 of the South County code of laws. And we're going to discuss what you must do and explaining agency to your client. Now, last week, we discussed what a meaningful explanation of agency was, as well as the seven key words that I believe you should always use in your explanation in order to make it meaningful. Now if you missed that episode, or if you missed any other episodes of addition, dirt you can find older edition darts on any podcast platform, as well as by clicking on Blair Cato calm at the top of our website, we have a little button you click for podcast, and it'll bring up the podcast. This is our 35th episode. And I've looked at all the stats for all of our episodes, and in case you're ever wondering, escalation clauses wholesaling the podcast on fake offers, representing buyers with fizbo, sellers and seller disclosure exempt and remain our five most downloaded episodes. Now I personally would like to see a little bit more downloads of how to represent represent someone when they've gone through a divorce. Our podcast on fair housing, as well as writing writing contracts when the seller is doing owner finance, I think those are also some important issues, it should be getting some more downloads in my views, don't hesitate to go back and listen to some of those old podcasts when you have some time. This week, we will look at what is meant by first practical opportunity and handling disclosure agency in electronic situations such as emails and text. In my quick take this week, I'm also going to cover the decision by the Supreme Court last week on college athletics, and how they are allowed to receive compensation. And this also gets into what they call ni L which is name, image and likeness. And I'm going to talk about what that could mean for the Clemson Tigers and the South Carolina Gamecocks moving forward. And then finally we'll have Gary's good news only. But before I begin, I would ask you please do me a favor and tell three real estate agents that are not in your market about this show. I want to continue to grow the show beyond the middle is in the Upstate. And I would appreciate it if you were to help us do. So I cannot thank you enough for all the downloads that you guys have done over the last six or seven months. Now let's move on with our show. So as I mentioned, last week, we discussed meaningful explanation of agency and how agents struggle with that. And I told you there were seven key words to use in that explanation of agency that would help give you a meaningful explanation of agency. And those seven words again, our wall, disclose choice, representation, relationship, writing and protection. And if you will use those seven words in your agency disclosure, I believe you will have a more meaningful agency disclosure. And I believe that agency disclosure will get signed more often. Now, assuming that you have perfected your meaningful explanation of agency, as I suggested, which was writing it down, memorizing it, practicing it on a family member or friend and making sure they understood it, and that it was clear, and it covered all the words in terms of needed. Now we need to look at when and how you deliver this meaningful explanation. Well, under 4057 370, the statute holds that you must at the first practical opportunity, after substantive contact provide a meaningful explanation of brokerage relationships in real estate transaction. So the key words here to look at Obviously, we've already talked about meaningful explanation is first practical opportunity and substantive contact. So what is a practical opportunity, when is the first practical opportunity upon us? And then what is that substantive contact that triggers that? So that is a triggering because it says the word after remember every word in a statue have a has a particular meaning. The word after means there's an order. So after subjective contact occurs, then at the first practical opportunity, you must provide the meaningful explanation of agency and includes brokerage relationships in the transaction, what must be included as disclosure relationships offered by the firm an explanation of customer Client Services, as well as the disclosure, the brokerage relationship form, and we talked about in your agency explanation how you would talk about the difference between customer and client services and so forth. So we pretty much have covered that. But we need to today try to figure out what is meant by first practical opportunity, and what is meant by some bits of content. As we roll into this remember, agency is never presumed in South Carolina. In fact, the statute goes even farther and says that a payment or even a promise of pay payment to a real estate brokerage firm does not determine whether or not an agency relationship has been established. agency has to be a written agreement. And there are certain things that must be in that agency agreement, which we will discuss at a later date. But for Tom sakes, today, of course, we're talking about the length of the term the price range of which they are looking to buy, and so forth. But until this written agency agreement is established, you may not provide any client services at all, to the consumer, no agency services at all. If you begin to give client agency services before you have given this meaningful explanation of agency. And before you have entered into written agency, you have now violated the South Carolina code on real estate, please don't do that. I also would tell you at this point, that when you look at the customer and Client Services, as a whole, I don't think there's a whole lot you can do for a customer that does not equate to client services, I would also caution you in continue to try to give consumer or customer services and not Client Services. When working with a consumer, it is very, very easy to move from customer service to client services without even realizing it. Because those services include advising, advocating and counseling. And as I said, in last week's podcast, I don't know what you can do for a consumer that doesn't really include those three things. And that is one knowing when to give your meaningful explanation of agency is so important. And as I mentioned, I think when you give this meaningful explanation of agency, you will wind up having more people go ahead and sign the agreement with you. And so you're not going to be fighting to get consumers to sign documents anymore. If you've learned how to do this the correct way. What is first practical opportunity? Well, what does it mean? Well, it's not defined in our statute at all. Does it say first practical opportunity means the following. But what I think we can apply is just good old common sense in the English language, to see what that means. And first practical opportunity to me, to me means as soon as possible, but not against common sense me soon as we can do it. That makes reasonable sense. But it's not unreasonable or against common sense would be kind of how I look at it. And so some, for example, if you were standing in church next to a consumer, and they said, Hey, I'm thinking about buying a house, I have $250,000 budget, what can I get? Is it practical? Is this the first practical opportunity for you to explain agency? So between the time you finish, sing at home and sit down? Is that a practical opportunity? Probably not. But it's common sense. How about at a party? Does it make common sense at a party when somebody starts asking you questions, and we'll get into some of these later in the show. But how about after you shown them five houses was that at the first practical opportunity, or when the contract was being signed? Or perhaps in an email, or a text message or a phone call? What are the first practical opportunities? So there's a lot of examples out there that you really kind of have to look at decide what is a practical opportunity. But in the cases I've handled, this issue has arisen, because they have waited until the contract is signed or being written, or they've waited until after they show in multiple houses. And we know without a shadow of a doubt, that's not your first practical opportunity. If you have had this consumer in your car, driving around, showing them houses, you've had plenty of opportunity to go over agency. It's not when you decide it's a good point in the representation or in the showing of houses, it's at the first practical opportunity when the conversation turns substantive. It's not when you decided to be it is when this becomes business. Once we start talking business, that's when you have to trigger that first practical opportunity. And we'll get into that more as we talk about what is substantive contact, and that that was pretty fairly defined in our statute. The first thing we have to understand is we're waiting too long. And a lot of cases, quite frankly, it shouldn't be done just as soon as you start doing business with this person. I just don't know how it's possible that you can show houses to a consumer and not offer client services, such as advice and counseling. And as I said earlier, until you have written agency, you cannot provide advice, counsel or advocacy period. And those would include telling a consumer the best price to offer, how much artists money to put down how long the closing should be in terms of how long we need before we close, pretty much anything in the contract that requires a blank to be completed other than the name and the address pretty much is going to be providing advice and counsel. I would even go so far as to argue that when they ask you what would be a good neighborhood for my child who has learning disabilities, or what house which neighborhoods are retaining their value that is providing advice and cancel, it's not an easy line to always see. And it's not a fair line. I understand that but remember, all I'm doing is providing you the information. I don't make these rules up on the seller side. I have argued for a long time as other brokers and so forth have that even discussing what price you would list a property for sale at is providing advice telling them what They need to declutter what repairs need to be made, what needs to be painted, when you are sitting there with the consumer at a listing appointment, is providing advice and counsel. So you have perhaps moved from consumer to client services without having a signed agency agreement. So the lesson to be had here is, is this as soon as possible, explain agency. And by incorporating these seven key words that we talked about last week, you should be able to get the consumer to sign up with you as a client. But here's the question for you to ponder. If the reason is you don't go over agency as soon as practical, is it because you're scared, they won't sign up with you, you're afraid you're going to scare them off by asking them to sign and commit to you? Well, wouldn't you want to know now, instead of after you showed them six houses, and spent hours at home doing research on what these people might want to look at, when you rather know now that they're not going to sign up with you that they're going to try to hedge their bets and not have to commit to us so they can try to use other agents as well to try to find properties. I would rather work zero hours for somebody, if I know they're going to screw me over in the end, versus working six or 10 or 12 hours and hoping that they will sign up with me. Also, if you explain agency early enough, and you are effective at it, and let these people understand that once you sign with me, I'm your agent, no one else, you don't need to be talking to anybody else and go over all the ways that your clients cheat with you and my perhaps we'll do a podcast on that coming up as well, because your clients are cheating on you. Perhaps they will quit cheating on you if you are more effective and explaining your agency. The point being is if you are more effective at delivering your meaningful explanation of agency at an earlier time, in this transaction, you have established that you're following the law, that you're a great agent, you're setting those boundaries as expectations, and you're locking this client in early and not after you've already done a bunch of work. And now you're starting to get scared that they may try to find somebody else to help them. The key here is first practical opportunity means as soon as possible, and to understand it is for your benefit. This is absolutely for your benefit. The earlier you get this done, the safer you are, you're not going to find yourself venturing over into providing Client Services when you should be providing customer services. I've told you before I have represented agents over at the real estate commission where this issue arises. And what we find what I found when I represented these agents is that they waited too long to get agency signed, they were helping them get their house ready for open houses, they were providing advice on how to declutter and paint it and pricing and all this and still not getting agency and listing agreements on there working with buyers, showing them 56789 houses and then they get agency signed, when they get the contract offer put together. It's not a hard thing to prove. Because when the consumer files a complaint, they'll say, Well, I was working with this agent for six weeks. And we finally found a house. And when they see the when the investigator sees the documents and the date of the contract matches the date of the agency agreement, all they have to do is go by the consumer say you work with his agent for six weeks before you sign this document, you have six weeks, what were the things we're doing for you? Well, they were telling me what kind of houses I should buy on the prices and what price range I should be offering. And all the things that you were telling them pretty much sinks, you, if you're going to have a case of issue, don't give them a slam dunk against you. And that's pretty much a slam dunk. So now let's examine those examples where we talked about first practical opportunity, if you're sitting in church singing a hymn and somebody says, Hey, I'm interested in buying a $250,000 house. Sure. Now we need to tell them agency, right? But does it? Is it practical to have to do that in church? No, it's not. So you can say hey, let's talk after church, and then do it or have it at a party. You're sitting there with friends and family and somebody starts just kind of asking you questions about a house and they said, Hey, you know, my wife and I might be interested in buying a house we've we've got a budget about 300 grand, it would seem very odd to break into your agency explanation right then. But perhaps there's a better way of handling it. Maybe you say hey, before you Let's talk later on where it's confidential, you won't have all these people listening to what we're talking about. Because a lot of what what's all about is confidential, or whatever you say, well, let's go over here and talk for a few minutes and then you can throw the agency on them. But you still have to do things even when it's socially awkward. You can't let them just run off at the mouth and tell you the things that are confidential without providing that agency disclosure. Clearly waiting to show four or five houses isn't the right time meeting with this consumer four or five six times a draft up what they're looking for and help them find it. After you're trying a waiting till after they've spent an hour with you in a meeting telling you what they're looking for how much money what neighborhood what color house what size house? How many bedrooms? How many bathrooms way too late, way too late? How about an email or a text and a phone message? Same way these are electronic means what is the statute say about those? Well, the statute tells us very clearly, that if the first substantive contact occurs over the telephone or other electronic means including the inner At an electronic email acknowledgement of receipt of the disclosure brokerage relationship, or maybe sent electronically, including the internet and electronic email, there would be your answer, you can send them back, a link to your agency disclosure and email or in a text. And you can go from there. And when you do that, you've fulfilled the law. But once you get face to face with him, go over it again with them very quickly, to make sure they understand it and also to get them to sign your documents on a phone call. It's no different if your consumer calls you when they start telling you all the things they want to do and how much money they want to spend on what neighborhoods they've now gotten to that level where you are learning confidential information and you have a duty to disclose agency. This point, it behooves you to say Hey, Mr. Koller, before you go on any further, let me go over agency because I am required by law to disclose agency. Now, if you have written down your agency explanation, and you have memorized it, you should be able to do it in just a matter of minutes. This is why it's so important to practice it, to understand it and to be able to regurgitate it as quickly as possible in a concise and understandable manner so that you can handle it when these situations occur. There is no exceptions in the law, we don't go, you have to provide agency as soon as practically a practical opportunity, except for if it's socially awkward or socially, you know, at a wrong time, or it's on the phone or it's on an email, or through a text or dm there's no exceptions for this, so you have to do it. So that's what we're talking about when we talk about first practical opportunity. Next week, we are going to cover what is substantive contact, and it's very important to be tuning in next week. So you'll understand the last part of this because we have such a new contact practical opportunity and meaningful explanation. Once you understand these three concepts agency should be a breeze for you. Let's discuss today the Supreme Court ruling of the NCAA versus Austin. And in this ruling, the Supreme Court and its unanimous decision non zero decision which is very unusual. They summed it up all in the final sentence of the ruling, the NCAA is not above the law. And in the ruling the Supreme Court notice that the NCAA which governs all collegiate sports, they stated they can no longer banned schools from providing college athletes, education related benefits and such restricted benefits had in the past included things even as innocuous as a laptop, so you could have a strangely poor child going to college on an athletic scholarship. And the school requires the student athlete to have a laptop but the school could not even provide the laptop. Well, this case will end that the court said that these restrictions by the NCAA violated antitrust laws. The NCAA argued that his rules restricted compensation because that's what college sports are amateur sports. Nancy de NCAA did not contest that it controls a monopoly over these student athlete labor, Neil Gorsuch, he wrote in the majority opinion that they would not overlook the restrictions because they happen to fall at the intersection of higher education, sports and money. And almost immediately after this was issued, the conferences began discussing how they will address education related benefits within their own leagues and their own institutions. And the supreme court now only bans the overreaching national NCAA rules, which means conferences in schools, they can make up their own rules. And one way that you may see this change law coming here soon is it for instance, in small sports, such as soccer and baseball, which limit the number of scholarships available, and oftentimes you will have two to three times the number of players as you will have scholarships, and so they have to divide the scholarships. What you might start seeing is that the schools in addition to these scholarships can start offering benefits to the students as well, that would be outside of the scholarships, maybe I don't know room and board might be considered outside of an academic scholarship, so they might be able to offer them room and board in lieu of the scholarships, it could have a drastic impact on some of these smaller sports. But let's talk now about how this could actually affect the South Carolina Gamecocks as well as the Clemson Tigers all the other local schools because that's what y'all care about. Well, here's my observations. Number one, the NCAA still sucks is a terrible organization. It always has been an organization. It's the most arbitrary run organization. Their rules have always been stupid. They apply in the way they want to to keep the powerhouses and power and a little guys in check. And it's a horrible organization. I hate everything about it. And that's it. It just is. I mean, let me make sure you all understand that the NCAA sucks, okay. Number two, the ruling in this case was more than just this case. It goes beyond because Gorsuch scoresheets the NCAA, with tons and tons of criticism about how arbitrary they are in their applications of rules. It was they blasted them. Number three legal experts doubt that the NCAA other rules on compensation will be able to win stand any other legal scrutiny because of how basically they said it was violating antitrust. And what we saw last Thursday or Thursday before last rather, was that US District Court, Claudia Wicken just comes down days after the Supreme Court issued this ruling and the Austin case that the NCAA rules on athletic compensation are subject to detailed antitrust analysis. And such an analysis show that the associations limit on education related benefits for athletes violate the law. So what we're talking about here is it an athlete controls his kneel, his nail is his name, his image and his likeness. In fact, so far, the quarterback at Wisconsin has already gone out and has trademarked his name, and his likeness, because he sees the writing on the wall that he'll be able to use that in marketing. So now what the NCAA has done is they tried to come up with a temporary solution regarding the athletes ability to make money from their name, image and likeness. And this involves schools setting their own individuals policies on this matter, that's not going to be a complete disaster letting Alabama decide what they can do against instead of Troy what Troy can do or South Carolina, South Carolina State or Walford or farming, I mean, that's not going to be inequitable at all, is it? No, this is going to be a big issue. What does it really mean for the Tigers again Gamecocks? Do you honestly think that Trevor watts would ever played at Clemson had ni l been available to him? I remember ni ni l his name, image and likeness. If Trevor lorincz, four or five years ago, whatever year it was that he came to Clemson it could have gone out to the athletic departments and said I'm Trevor Lawrence. I'm the best quarterback in high school. What kind of packages Am I going to get in terms of nl Do you think Clemson could have put together a competitive package against somebody say, oklahoma state that has oil tycoon Boone Pickens money, or the University of Texas or maybe even Southern Cal with the Hollywood money and all the Hollywood things? We're talking name image and likeness? Is the NCAA going to have a problem if a booster for the University of Texas who wants a Ferrari dealership says I'll give you a Ferrari for four years if you'll do a commercial or you want to live in this most expensive multimillion dollar housing complex? Sure, if you come out here as I'm a builder all you got to do is do a commercial for me and you can live in my two and a half million dollar house here on the lake for those four years as your compensation for your in i l What is this gonna do for recruiting Clemson and South Carolina compete with these schools that have deep pocket alumnus that maybe maybe we do? I don't know. Maybe some other people who donate to the University of athletics, maybe they might donate to the players. Instead, think of this how much money would Zion Williamson be worth? When he graduated Spartanburg day school? His likeness as a senior in high school was worth a ton of money already. They were selling Spartanburg day shirts, in fact, one of the rappers at a concert wearing a Spartanburg day basketball school jersey. So how much could Xi'an have demanded he went to do but how about this? What influence would Nike and Adidas have in this recruiting? Could Nike go to his eye on and say if you pick a Nike school, we'll give you a $20 million contract today instead of next year when you go pro, but I think that's what he got, like $20 million a year contract? Is that what they're going to do? Is Adidas gonna then try to compete with him. So if that's the case, in college basketball, is it now they'll be more important whether you're a Nike school or a data school and how those schools are going to line up when you have a college athlete, or high school athlete looking to potentially cash in there? Are they going to control where these athletes want to go into school? Are Nike, the Nike executives going to meet was eye on and say, Hey, well, you're a Nike kid. So here's your choices of the three schools that you can go to and we want you to go to Oregon because we're really trying to push that Oregon color thing, what kind of influence and how outweighed it is going to be? Secondly, are your boosters going to create these nio packages? Are they going to go out there and say, Hey, for your star quarterback, we will do this, this and this for his image. But you know, I'm not going to donate any more money to the school because I'm gonna be donated to this quarterback. And how much will these boosters control who they recruit? Well, I like to recruit a over here if you go after this quarterback, I will set up an ni l package and includes a car, a house and some cash. But I don't like this guy, you're recruiting so and you drop recruiting him then I'll give him money but I'm not going to do this and I'll package for him. So can you imagine the possibility of discrimination and issues of that nature where you have a booster dictating to the school which quarterback that He will give His package for name image and likeness but won't do it for the other one because he doesn't particularly like that kid. Otherwise, what also is going to happen with the power five is the ACC the SEC and the other power five, are they going to just leave the NCAA and create their own own group who knows what's gonna happen to Boise State and the other small schools of the world can do they have that? And lastly, how about the schools like Louisville with Papa john, Oregon with Nike, Maryland with Under Armour are those schools who And now have an advantage because of their relationships with their alumni who founded these companies. So the NCAA would argue that the schools are not allowed to put these packages together for their athletes. But if they can have people that can help them do that, it makes no sense. And of course, I also said that the boosters are not allowed to use these NHL packages as a way to recruit. I mean, come on, man. Are you that stupid? We were supposed to sit here when you have a school like Oregon that has this Nike money that's going to be attached to it and think that an 18 year old isn't smart enough to look at it and go, Wow, if I go to Oregon, I can sign a deal with Nike. But if I go to Maryland Elkins on a deal with Under Armour, give me a break. But a lot. I think there's good news only. realtor.com reports that homebuyers had another chance to snag lower interest rates this week, with the 30 year fixed rate mortgage averaging only 2.98%. According to fed Freddie Mac. As home listing prices broke another new record. realtor.com also reports that more homeowners are looking to take advantage and list their homes for sale new listings in June Rose 5.5% year over year and are up 10.9% over the prior month according to the new report. This is fantastic news. We need more inventory and it looks like we're seeing that here in the Midlands now on the Coronavirus, Coronavirus, Coronavirus. So according to the Journal of American Medical Association pediatrics, and if you've never heard of this journal is called Jama. It's one of the leading medical journals in the entire country, if not the world, they did this wonderful study on children wearing mask. Now what this study found was that many governments have made nose and mouth covering or face masks compulsory for schoolchildren. But they said this evidence that this does anything is very weak. The question whether nose and mouth coverings increases carbon dioxide and inhaled air is something very crucial that needed to be studied. They said as a large scale study in Germany that studied the adverse effect and parents and children. They use data from 25,930 children that showed that an average 68% of those children had problems when wearing face coverings or nose and mouth covering. Now what they broke this down was is the normal content of carbon dioxide in the open is about 0.04% by volume that equates to 400 ppm. A level of point 2% by volume or 2000 ppm is the limit for closed rooms according to the German Federal Government, and anything beyond that levels unacceptable. Well, they measured rates at ppm at 13,001 20 and 13,009th. In when it for kids wearing surgical mask, which is higher than what was already deemed unacceptable by the German Federal government by a factor of 6%. They found children had carbon dioxide levels as high as 25,000 ppm. And the conclusion was there was ample evidence that adverse effect of wearing such mask suggested decision makers were the hard evidence produced by these experimental measurements and suggests that children should not be forced to wear face mask. All we ask is they follow the science. This is the science. As of 6am July 4 157 million Americans are fully vaccinated 47.4% of the country's population. According to the CDC, South Carolina has now over 2 million vaccinated people, which is 39% of our population. Now the seven day average did increase slightly to 12,005 14. But it is still 95% down from the peak of January 10. The seven day average for positivity is now hovers around 2.0. There was a slight increase of 1.1% for the seven days for hospitalization. But that's only 1851 people. And the best news of all is the seven day average for new deaths down to 206, which is also a decrease of 11.5%. So lots of good news out there. So appreciate everybody tuning in this week. And everybody will tune in next week as we conclude 4057 370 as our as we walk through that statute and how to do your agency at the first practical opportunity when the conversation turns substantive. If you liked this podcast would ask me please like us, subscribe to us and please please please share us and most importantly, please come back next week for another episode. hope everybody has a wonderful weekend.