Question: Can you clarify if anything has changed regarding open houses? If consumers are walking through an open house that I am hosting on behalf of the seller, do I need to have them sign any type of buyer agreement?

Answer: The Illinois Real Estate License Act rules regarding agency are still the same. If you are sitting an open house on behalf of your seller client and an unrepresented buyer starts to engage you in a more detailed discussion about the property, you will have to take some action before this buyer begins to disclose confidential information to you. The practice changes do not require a written agreement with the buyer when you are representing the seller.

If you are only representing the seller, you must give the buyer a Notice of No Agency. The Notice should be provided to the buyer at a time intended to prevent the buyer from giving you confidential information. If a buyer is asking for more than basic information on the property, such as other listings, loan options or starts expressing a real interest in the property, you should provide that Notice of No Agency.

If you are representing the seller, and this seller has consented to you acting as a dual agent for their transaction, you could also represent the buyer. If you are representing both the seller and the buyer in a limited role as a dual agent, you will be required to obtain a written buyer brokerage agreement and a statutorily required dual agency disclosure and consent from the buyer. Having the buyer only sign the dual agency consent form is not enough – you will still need a buyer representation agreement to comply with the practice changes.

Question: I am hearing that brokers representing a buyer will have to provide copies of their buyer brokerage agreements to listing brokers in order to schedule showings or be admitted into the property. Is this true?

Answer: No. The parties to the buyer brokerage agreement are the buyer and the buyer’s brokerage company. If a buyer broker is asked to provide a copy of this agreement, they will need the permission of their designated managing broker and their client, who may not agree to the sharing of the same. Requesting copies of buyer brokerage agreements may end up deterring buyers from viewing the property, which in turn would not be beneficial to the seller, or the buyer.

To assist with keeping the peace concerning this issue, we have prepared a document titled Affirmation to Seller’s Broker of Buyer’s Representation Agreement. This is just as it sounds – a confirmation to the listing broker that the buyer broker does indeed have a written brokerage agreement with their client. It is available in the New and Revised Forms section on The Way Forward page.

Question: We have a form called a “touring agreement” in our market. Is a touring agreement compliant with the settlement practice changes and the Illinois Real Estate License Act?

Answer: Regarding the touring agreement that is making the rounds here in Illinois, here is the section that may be problematic as it relates to license law:

1. Purpose of Agreement.

(a) The sole purpose of this Agreement is for Broker to: (i) consult with Buyer regarding specific properties; and (ii) assist Buyer in locating and touring properties. These activities collectively constitute the “Touring Services.”

(b) In connection with providing the Touring Services, Broker shall adhere to any and all non-waivable duties required under applicable state law for real estate brokers working with a customer in a non-agency capacity.

(c) Buyer and Broker agree that they are not entering into an agency relationship.

Under the Illinois Real Estate License Act (RELA), there is no specific “non-agent,” “facilitator,” or “transactional agent” capacity. Thus, the Illinois licensee can’t really serve as a non-agent for anyone while touring properties. Showing homes and answering the related questions are a major part of an agent’s services to clients. An Illinois licensee could, under RELA, treat a consumer as a “customer” by giving the consumer a Notice of No Agency but in that scenario, the agent represents the other party in a transaction, the buyer or the seller. To fulfill their duties to their own client, they could assist the unrepresented customer (after giving the Notice of No Agency at a time intended to prevent the customer from giving the agent customer’s confidential information) for the benefit of their own client.

In other words, a buyer’s broker could treat a FSBO as a customer with proper notice of no agency to assist the buyer in purchasing FSBOs property. A seller’s broker (listing agent) could show their listed property to an unrepresented buyer with proper notice of no agency.

However, in the “touring agreement” scenario, there is an attempt to define touring services and to substantially limit agency duties. The act of touring or showing a property puts the consumer in a position of asking questions and seeking input from the professional that would imply agency duties. We don’t believe that this will be compliant with RELA.

One document that would work here is a simple non-exclusive brokerage agreement, like the Illinois REALTORS® Form 341 Non-Exclusive Buyer Representation Agreement.