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Real Estate Consumer Bill of Rights

Page history last edited by PBworks 16 years, 5 months ago

Encouraged by a petition signed by leading real estate consumer advocates, Frank Torres, attorney for Consumer Union, the non-profit publisher of Consumer Reports, called for the creation of a "Home Buyers Bill of Rights" in his testimony before the Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit on May 2, 2001:

 

"Now may be the time to discuss a Home Buyers Bill of Rights that would include substantive protections dealing with the relationship between a consumer and the various elements of the real estate industry, including agents, appraisers, lenders and the like. Such a proposal should include a suitability requirement for mortgages and home equity loans."

 

Erle Rawlins, III, noted real estate consumer advocate from Dallas, Texas prepared this draft bill of rights two years earlier, BEFORE growth of listing entry only business models.  Most of the items below refer to buyer needs.  Should we develop a separate "Home Sellers Bill of Rights"?  What additions would you make to this list, particularly as it relates to e-commerce the needs of web-savvy consumers in coming decades?

 

 

DRAFT: REAL ESTATE CONSUMER BILL OF RIGHTS @ 1999

 

1. Right of information access without limitation.

 

No consumer should be denied access to information sources just because that individual is not a real estate professional or because the real estate professional attempts to use membership in a trade association or a listing service as a condition of “representation”. To the extent information may be available, its access should not be denied except to lawfully protect the adverse party only.

 

2. Right not to be coerced into using products or service providers.

 

No consumer should be forced, without the consumer’s full informed consent, into using any particular service or product. Consumers should especially be cautioned where the real estate professional may, by office policy, be required to act as a dual representative or shift services without the consumer’s full informed consent. Consumers have the right NOT to use real estate brokerage services and to “self-represent” if so determined by the consumer.

 

3. Right to be respected as an individual.

 

Consumers of real estate services vary as to particular real estate needs. There should be no difference in the way an individual is treated by a real estate professional especially if that individual chooses not to be represented or chooses to use a real estate professional whose services offered may be different in custom or practice from other real estate professionals.

 

4. Right to a full disclosure of all material facts known.

 

Selective information, especially material facts, given to induce a buyer or seller into a real estate transaction is wrong. Consumers should not be denied access to quality information that is known, nor prohibited in diligently pursuing such information.

 

5. Right to have advance, competent legal advice.

 

Access to legal advice in advance of pursuing a real estate transaction is critical to the consumer because it better establishes “preventive” safeguards while possibly avoiding legal pitfalls that may otherwise be cost prohibitive for the consumer.

 

6. Right to legal remedies for wrongful actions.

 

Service providers or others, who knowingly attempt to coerce consumers into transactions that could prove harmful to the consumer, must bear the risks of such harm to the consumer including possible punitive claims. Requiring the consumer to waive any right to sue others should never be a condition of completing a real estate transaction.

 

7. Right to protect confidential information.

 

Consumers participating in real estate transactions should have the right to declare their intention that transaction information not be disseminated to others, except as may be required by law. Consumers must understand that listing services and brokerage companies cannot impose disclosure of information requirements on the parties to a real estate transaction.

 

8. Right of access to alternative service providers.

 

A real estate transaction involves multiple parties other than buyers and sellers. Consumers have a right to expect service providers, without compromise or limitation, to be loyal, to protect the interests of individual consumers only and to act in all ways as a “true fiduciary”. To the extent, such loyalty is not offered or is compromised or limited in anyway, or if the service provider’s loyalty is required to be given the adverse party, such disclosure should be made in advance of the service provider selection by the consumer.

 

9. Right for an advance disclosure of all fees and to pay for services based on the value of the service received.

 

Typically fees paid in a real estate transaction for services provided (mortgage, inspections, brokerage, etc.) are based on custom and historical practices and generally not reflective of true service value. Consumers of real estate services have the right to negotiate for specific fees based on the actual services provided and to know all the fees that are to be earned by the service providers even if the consumer does not pay those fees directly. Fee for services allows the payment for the value of the actual service delivered.

 

10. Right of security for all electronic transactions, communications and information seeking.

 

When using electronic methods to conduct real estate transactions, including negotiations and the payment for services, the consumer has the right to secure transmissions to protect the consumer’s financial interests and ability to negotiate without other parties having access to that information. To the extent such transmissions cannot be secure, the consumer has the right to know the risks this may cause to the transaction in advance.

 

Copyright 1999, Erle Rawlins III, 214-363-7400

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