Guest Blogger - Steve Kitnick of www.NevadaCE.com
Steve presents an interesting situation he has come across in his training and a true misuse of the intent of the Nevda Real Estate Division forms 636 and 637. Read the full post below for all the details.
Download the forms discussed in this post:
Some short-sale listing agents may be circumventing the intent of NRED Form 636 and 637 which went into effect under SB69. They are presenting offers directly to the seller's lienholders. Their intent appears to be avoiding having an offer presented and accepted by their seller's subject to lienholder(s) approval, thus, requiring them to place the listing in a contingent status, according to local MLS rules.
Consider the following: Nevada Real Estate Division (NRED) Form 636 Waiver Form states, "In representing any client in an agency relationship, a real estate licensee has specific statutory duties to the client. Under Nevada law only one of these duties can be waived. NRS 645.254 requires a licensee to "present all offers made to or by the client as soon as practicable." This duty made be waived by the client. Last May 2008, it came to my attention that some Nevada real estate licensees were using Form 636 so they could submit offers directly to the Seller's lienholder(s). According to Mr. Jan Holle, Compliance/Audit Investigator/Nevada Real Estate Division, "The intent of Form 636 was to allow limited service brokerages to be in compliance with NRS 645 that states 'All Offers Must Be Presented.'
The intent of Form 637 was to allow a mechanism for a buyer's agent to deal directly with a seller if this was in agreement with the seller and the seller's agent." The question was posed, "so the seller signs NRED Form 636 which allows the listing agent not to present all offers. Who presents the offer to the seller? Mr. Holle stated, "It could be the buyer's agent or an unrepresented buyer. In the case of a buyer's agent presenting the offer - Form 637 Authorization To Negotiate Directly With Seller would need to be in place along with Form 636. If a buyer was unrepresented, Form 637 would not be required... there could be many scenarios depending upon whether or not there are licensees involved on the buyer side, seller side, or both, and what type of services are provided by the brokerage(s).
NRED Compliance/Audit Investigator was asked about this scenario: The seller is represented by a full service brokerage. The listing agent has the seller sign Form 636 only! The listing agent places the listing in the MLS and then advertises it various media. Agent receives offer from buyer's agent to purchase the property. How does the seller know of the offer, receive the offer, or respond to the offer, since they waived a duty owed to them to have offers presented to them? The buyer's agent can not talk to the seller without written permission from the seller and their broker. Mr. Holle's reply to this scenario was, "Using the form [636] in this manner and having the seller's agent receiving the offers was not the intent of the waiver. Using this form in this way could place the seller's agent in violation of NAC 645.632 as he/she for whatever reason is receiving the offers. If the seller's agent is receiving offers then it is his/her duty to have the seller respond to the offer and provide the buyer or buyer's agent with written notice of acceptance or rejection per NAC 645.632. If the seller has waived the right for the seller's agent to present all offers than the seller's agent should not be receiving the offers. If the seller has waived the right for the seller's agent to present offers than the MLS should state that buyer's agent is to present offers to the seller.
If the form [636] is not being utilized correctly, then the Division should be notified via a complaint form.
