Within the Law

Legally, managing brokers may sell real estate in Illinois, no matter whether they are managing a large office with dozens of agents or if they just have one or two people who help sell on a part-time basis. But they must follow certain disclosure guidelines, says Illinois Realtors Director of Communications Jon Broadbooks.

The need for these guidelines surfaced in 1995, when Illinois was one of several states that were looking at potential conflicts of interest in real estate deals. The Illinois Business Brokers Act of 1995 defines the roles of brokers and managing brokers, as well as disclosures required when working with clients. The Real Estate License Act of 2000 further defined the expectations around broker representation and dual agency.

“If you’re the managing broker and you’re listing a property and you have one of your brokers in your office who brings a buyer for that property, there are confidentiality issues that have to be sorted through under agency agreement,” Broadbooks says. “The managing broker would have to either set up a system in which he did not have access to any of that privileged information on the potential buyer’s side. Another option would be to declare a dual agency agreement.”

Under a dual disclosure agreement, the managing broker declares that he or she has access to all of the information on the buyer’s side and on the side of the seller. The very nature of buyer and seller representation make the dual disclosure mechanism necessary. But in firms with just a managing broker and one or two agents, it can become too difficult for managing brokers to compartmentalize in such a way that everyone’s information is protected.

“It comes down to how you want to handle confidential information and doing it in a way that follows the law,” Broadbooks says. “As an association, our stance is to just follow the law. Make sure you make all of the disclosures or make the right decisions about how you’re going to handle this information.”

For Debra Myslicki, owner and managing broker of Myslicki Real Estate in LaGrange, the smaller size of her company makes it easy to be flexible in situations like these. “If I have a listing and someone wants to buy it and they don’t want to do a dual agent transaction, I just turn them over to one of the agents in my office,” Myslicki says. “Just whoever is available or who I think would be a good fit for somebody.” She believes that selling is a necessity for managing brokers of small firms.

“If I’m really busy with my own clients and I don’t feel I have time to properly service somebody because I won’t take more people than I can personally handle, I will turn them over to one of the other Realtors in my office,” she says.