Listing Agent Has to Disclose Family Relationship With Buyer
Question: We listed our North Phoenix home with our neighbor who is a real estate agent and also a Realtor. The next day we accepted an offer to purchase our home from a Limited Liability Company (“LLC”) buyer. This LLC buyer planned to remodel our home, and then “flip” our home to another buyer. Our Realtor recently said that this LLC buyer, however, may now not be able to buy our home because of problems getting a short-term remodeling loan from a hard money lender. While playing golf my husband recently learned from another neighbor that our Realtor’s brother is the owner/manager of the LLC that is buying our home. We are livid, and now know why we immediately received an offer from that LLC. Shouldn’t we have been told by our Realtor that the buyer of our home is basically her own brother?
Answer: Yes. A.A.C. R4-28-1101(E)(2) requires disclosure by a real estate licensee of any immediate family relationship, such as a brother who is the owner/manager of your LLC buyer, in a transaction. Therefore, you have the right to file a complaint against your listing agent with the Arizona Department of Real Estate. In addition, because your listing agent is also a Realtor, you have the right to file a complaint with the Arizona Association of Realtors for a violation of the Realtor Code of Ethics. Finally, if the LLC fails to close the purchase of your home, you may have a claim for money damages against your Realtor if you lose money on the sale of your home to another buyer.
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