A seller gives explicit instructions to the listing office: No showings take place unless the buyer supplies proof of funds first. The listing agent puts this information in the “Broker Remarks” section of the MLS listing. A buyer’s agent then sees the listing and requests to see the property with his buyers. The listing agent agrees but reminds the buyer’s rep about the proof of funds requirement.
The buyer’s agent is furious – he feels his customers shouldn’t have to show personal information like this before even seeing the inside of the property. This has to be illegal, right? Or at least unethical behavior on the part of the listing agent?
In short, the answer to both questions is no.
A seller has a fairly wide range of prerequisites he can choose from before he allows a property showing; he can even demand an actual offer from the buyer. While this tends to happen with high-end or celebrity-owned properties, it’s important to understand that a seller can require information from a buyer before the buyer can step onto the property.
Many times, a seller requires information, such as proof of funds, as evidence that the buyer has a serious interest in the property.
If you are a listing agent with a specific seller request, make sure to get this instruction in writing – i.e., as part of your listing agreement or in an email sent by the seller. If you’re a buyer’s agent, let the buyer know what the seller requests when you bring the listing to them.
Please note: In many cases, personal information regarding the buyer can be redacted or blacked-out. For instance, an account number or a social security number or a home address could be redacted in any document requested by the seller, such as a proof of funds.
Standard of Practice 3-9, which supports Article 3 of the Code of Ethics, says Realtors shall not provide access to listed property on terms other than those established by the owner or the listing broker. When a seller requires a buyer to meet certain prerequisites before entering the property, Realtors are obligated to comply.
If the listing agent permits access contrary to the seller’s instruction or if he ignores the seller’s instructions, both Realtors could be the subject of an ethics violation. If the listing agent is at fault, it would be a possible violation of Article 1 based Standard of Practice 1-16 and in the case of a cooperating agent, Article 3, Standard of Practice 3-9, could apply.
This article was written by Meredith Caruso who is Manager of Member Legal Communications for Florida Realtors