Realtors and Client Confidentiality

by Ross Kaplan on October 9, 2015

The First Second to Know

Want to know who just got a plum, new job out-of-town?

Is about to lose their current one?

Getting divorced?

Just had a financial windfall?

Or, for that matter, any number of other highly personal news?

Ask their Realtor.

Loose Lips Sink  . . . Realtors

Except, of course, that a good Realtor will never tell you.

In addition to knowing the local housing inventory, knowing how to market, negotiate, etc. there’s one other quality that’s indispensable to being a good Realtor:

Knowing how to keep a secret.

P.S.:  And no, there’s nothing analogous in real estate to “attorney-client privilege” — that is, a court-recognized proscription against revealing information that a client shares with their agent.

But a Realtor with any common sense who wants a thriving practice, hardly needs to be told to keep any sensitive client information confidential — not just the standard “price, terms, and motivation.”

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Sunday Open House <> Vikings’ Game

He (or she) who ignores the first rule of Sunday open houses — “thou shalt not compete head-to-head with a Vikings game” — is likely to vikingsregret it.

Or at least, have a sparsely attended open house, with only one of the decision makers present (the non-football watching one).

Which is why savvy agents take care to check the Vikings’ schedule — and plan their open house around the game.

This Sunday’s easy:  it’s a “bye” week (no game).

Role of Weather

Good weather helps too, of course.

It’s just that, in order to maximize the number of Buyers who see it, it’s important to schedule the open house by mid-week, when Sunday weather forecasts are still iffy.


how much?

Ballpark Estimate:  $35 Billion

“Resale values on Volkswagen AG’s diesel cars in the U.S. have taken a tough hit in the weeks since auto maker’s emissions scandal emerged, falling an average of 13%, or about $1,700 per vehicle since mid-September as car dealers stay away from the tainted vehicles, according used-car pricing guide Kelley Blue Book.”

“Kelley Blue Book:  Volkswagen Diesel Car Values Decline 13%”; Wall Street Journal (10/6/2015)

I’ll leave the number-crunching to the CPA’s, but investors trying to estimate VW’s potential liability have these figures to work with:

A. Number of VW diesel cars reportedly affected worldwide:  11 million
B. Drop in value per car:  $1,700
C. “A.” x “B.” = $18.7 billion
D.  Add:  30% for legal fees (plaintiff’s attorneys in class action; legal defense, etc.) = $9.35 billion

Grand total:  $28 billion


Of course, that’s just for what are called “compensatory” or “economic” damages.

Add 25% in punitive damages, government fines, etc. and the total (legal) price tag could easily trip $35 billion.

P.S.:  A lot of money, to be sure, but nothing Apple couldn’t pay out of petty cash.

See also, “Four Reasons Why Apple Should Buy VW.”


Challenge:  Defining “First Substantive Contact”

[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced.]

In an online, hyper-connected 24/7 world, when do Minnesota Realtors trip the threshold for delivering a required state disclosure to baseballconsumers?

Called “Agency Relationships” and mandated by the Minnesota Department of Commerce, the form summarizes the various types of roles Minnesota Realtors play relative to consumers (“Listing Agent,” “Buyer’s Agent,” “Facilitator,” etc.), and must be proffered — but not signed — at the point of “first substantive contact.”


When exactly is that? (you ask).

At the point where the Consumer – Realtor conversation moves past social pleasantries, and the prospective client begins discussing their price, terms, or motivation.

Because that frequently now happens online (via email, texts, Instagram??), the safest course for Realtors not wanting to run afoul of the DOC is to electronically deliver the disclosure, vs. waiting for a physical meeting.

In the same email, most agents take pains to underscore that the form need not be signed immediately.

P.S.:  If you’re not a baseball fan, the photo above shows a batter who may (or not) have checked their swing, in which case they are/aren’t charged with a strike.


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“Top 10” New Names for Minneapolis’ Lake Calhoun

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“Lake Wobegon”. . . for Real If Minneapolis’ Lake Calhoun had an equivalent to “Denali” — a long-established Native American Indian name used by locals — I’d be all for it. But, as a (mostly) life-long Minnesotan, I’m not aware of any such alternative (sorry, “Bde Maka Ska,” the Dakota name for “White Earth Lake,” […]

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Realtors, Financial Advisers, and Fiduciary Duty

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Transparent Compensation vs . . . Not “An astounding 75 percent of consumers believe, incorrectly, that all financial advisers already have to act in their best interest.” –“Is Your Financial Adviser Making Money Off Your Bad Investments?”; The NYT (Sept. 29, 2015). Want one more reason why millions of Mom-and-Pop investors are opting for low-cost index […]

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