MANDATORY COMPLIANCE FOR AUTHORITY TO NEGOTIATE FOR SALE OF REAL ESTATE/REAL PROPERTY
So, here we are. 10 years after the Real Estate Service Act of 2009 (R.A. 9646) became law, we, the citizens of the Republic of the Philippines, finally have a memorandum from the government, requiring ALL real estate brokers to have a written Authority To Negotiate For Sale or Authority To Sell real estate properties.
It took one decade, but its better late than never.
Does this memorandum have any deep impact in the day-to-day operations of real estate brokers, agents, sellers and investors? Absolutely!
Many professional brokerages and prudent investors have required an Authority To Sell before starting negotiations, as part of their sales process and due diligence, years before this topic even became an issue. The difference now is one can use this memorandum as a tool to threaten or effectively filter out malicious parties that are trying to sell properties.
To give you a scenario:
Buying Broker will ask Selling Broker if s/he has an Authority To Sell for the property s/he is selling. If Selling Broker says s/he doesn’t, Buying Broker can just, ignore the current Selling Broker and move-on to the next Selling Broker who has an Authority To Sell.
The first Selling Broker would receive no repercussions or penalties of any sort. S/he would just offer the property to the next sucker who would not require an Authority To Sell.
A Buying Broker can ask a Selling Broker if s/he has an Authority To Sell and if the Selling Broker cannot provide the required document, the Buying Broker can file a report to the PRC Real Estate Board and submit all the incriminating evidence to make certain the Selling Broker gets penalized and/or have his/her license suspended or revoked.
We’re hopeful that Chairperson Binag would be the person to finally help uplift the real estate service industry and do better than her predecessor.