The following case study highlights the importance of following the terms of brokerage agreements and sending documents to your client in a timely fashion.

The Facts

Disclaimer: All names and dates are fictitious.

On January 13, 2024, real estate licensee Gary Gaetti (“Gaetti”), whose license was associated with the licensed Real Estate Firm of Homerdome Realty (“Homerdome”), entered into an exclusive right to represent buyer agreement with Mike Mordecai (“Mordecai”) to purchase a “single family home.” The agreement was set to terminate on May 1, 2024.

In his complaint, Mordecai alleged that after putting in an offer on a property at 755 Aaron Drive for $200,000, Gaetti advised him to change his offer to include an escalation clause up to $205,000. Mordecai alleged that he was uncomfortable with that price and would prefer $202,000. According to Mordecai, Gaetti became frustrated with his unwillingness to make an offer and stated that Mordecai was forcing him to take a lot of time away from his family.

Gaetti responded that he had discussed with Mordecai that the listing agent of the property would only be accepting offers until 5 pm on Monday, January 22nd. At 4:45 p.m. on the 22nd, Mordecai asked Gaetti if he could still submit an offer on the property. Gaetti reiterated that offers were due by 5 p.m. and that he had to pick his children up from day care by 5:30, but that he would do his best. After some back-and forth with Mordecai, Gaetti picked his children up at 5:30 p.m. and told Mordecai that he would not be able to submit any additional contract revisions until after 6 p.m. Gaetti alleges that Mordecai became “rude and condescending” to him, then later received an abusive phone call from Mordecai’s mother. Gaetti then blocked Mordecai’s phone number.

Gaetti advised Mordecai that he should find another licensee to represent him. Gaetti stated that he told Mordecai in a phone call that he would send Mordecai a release of buyer agreement “that evening” for signature. Gaetti admitted that he never actually sent the release to Mordecai. In addition, Homerdome’s policies stated that a brokerage relationship continues until the completion of performance or the expiration of the brokerage agreement.

The Result

The Real Estate Board found that Gaetti failed to exercise ordinary care under Code § 54.1-2132 A. 4. by

• Falsely advising his client that he would send a release of buyer agreement form;
• Blocking Mordecai’s number while the buyer agreement was still active;
• Failing to perform brokerage services despite the buyer agreement still being valid; and
• Failing to follow brokerage policies regarding termination of brokerage agreements 

The Penalty

Gaetti agreed to pay a monetary penalty of $550 and $350 in Board costs. In addition, he agreed to complete at least six hours of Board-approved PL education pertaining to Real Estate Law and Regulations.