by Stephen L. Fussell Consumer Protection Officer
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One of the Real Estate Commissioi~s many functions is to investigate complaints that have been filed against real estate licensees. These investigations generally involve a review of the various documents associated with the real estate transactions in question. Recently, the Commission has observed an increase in the number of documents which have been signed by agents on behalf of buyers and sellers. |
Apparently, some agents believe a listing agreement with the seller authorizes the agent to sign transaction documents (offers to purchase, closing statements, etc.) on behalf of the seller. While the listing agreement does create an agency relationship between a seller and a listing firm, it does not authorize the firm or any cooperating agent(s) to sign documents for the seller.
Likewise, real estate licensees are also cautioned against signing documents for buyers. Since a licensee usually acts as an agent of the seller, rather than the buyer, there is even less justification for signing documents on behalf of the buyer. Even in a transaction in which the licensee acts as a "buyer's agent," the licensee should still avoid signing contracts or other written documents. Other-wise, the agent risks the possibility that the buyer will disavow the agent's authority to act on the buyer's behalf. The document in question may then be ruled invalid or the agent may be held personally responsible for it.
The best policy is to encourage the parties to sign the documents for themselves. If a document must be mailed to a party for signature, the signature should be acknowledged by a notary public to confirm authenticity.
When a party is unable to personally sign a document-the agent representing him should obtain the written permission of his client before signing any document on his behalf This grant of authority is best accomplished through a power of attorney. An agent's failure to obtain his client's permission prior to signing a document may result in a document that is unenforceable or that obligates one or more parties to an unfavorable agreement. It could also result in possible litigation against the agent who may be held personally responsible for any financial or other liability created under a document that he or she signed without proper authority. An agent should never sign a document for a party he does not represent, such as a customer.