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Minimum Services in Real Estate: Definition, Rules & Fines

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

Understand what your expectations are to your clients and how to meet the minimum requirements demanded of real estate agents. Learn about basics of advertising and gifts.

What are Minimum Services?

When you complete your license as a real estate agent, you will find that clients have various needs and demands. Some sellers will expect you to handle many details related to selling their home, beyond what your listing agreement states. Other clients may have few needs and expect little from you.

As their agent, you must complete at least some minimum services, basic tasks and responsibilities, that are expected by the real estate commission and required as a licensed agent. Each state may have variations of minimum services, but there are general minimum services are typically apply to all real estate agents and brokers. These minimum services include:

  • Fulfill the commitments to the client both orally in writing
  • Present all offers to your client quickly
  • Disclose adverse material facts that you are aware of
  • Know your limits and do not give advice on areas in which you have limited or no expertise
  • Correctly handle the funds and property you receive
  • Hold certain pieces of information confidential, such as:
    • the seller's willingness to accept less
    • the reason the seller is selling
    • that the seller may agree to financing terms
    • any information that may make the buyer bias against the property
  • Be responsible for your actions and not blame your client for any of your acts or mistakes
  • Keep other offers and interest private and do not disclose to buyer's agent or buyer

Advertising Laws

Advertising will be a vital part of your business to help you attract buyers and sellers to represent. Agents must follow appropriate guidelines to ensure potential clients are not misled. For instance, you must include your broker's information on your ads, including the name of the brokerage as it is registered with the state.

When you advertise, your statements must be true and honest. In real estate, puffing refers to making general comments and statements that are not necessarily true but cannot be proven as false. You may see an ad that says, 'Million Dollar Views.' You can't put a price on a view, but this type of comment may attract buyers who are looking for a beautiful view. This type of statement is allowed because it doesn't lie about the condition or features of the home.

You cannot make claims or promises that you can't follow through on. For instance, you can't offer to give a gift to the buyer if there are unstated conditions that you don't share in the ad.

Other Guidelines

There are other guidelines to consider when representing your clients.

Let's imagine you are representing a seller, Wanda. She wants to minimize the amount she pays in taxes on the proceeds of her house. Wanda asks for your input on how to handle the profit on the sale. You need to explain to Wanda that you are not a certified financial planner and your expertise does not extend to taxes and earnings.

This can apply to advice about home inspections, appraisals, or any other types of advice your client may need. Your best response is to encourage your client to consult with a professional. You will be misleading Wanda if you offer insight into areas that are not your expertise.

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