What are pay-per-showing services?

QUESTION: I serve as the Broker-In-Charge of my firm. Recently, several of my agents have asked me what our policies are related to pay-per-showing activities. What are these  programs and what risks are associated with allowing my agents to participate? What policies should the firm consider implementing in relation to these new services?

ANSWER: Technology continues to transform and innovate all areas of our professional and personal lives. There are now platforms for agents who are unable to show a property to  solicit the help of other licensed agents by showing their client properties while the buyer’s agent is unavailable. Prior to these new services, many firms would create a pool of agents within the firm to assist each other when they were unable to accommodate their clients’ schedules for showing homes. This solution helped keep the fiduciary duties of the agents clear as all agents were affiliated with the same firm and could clearly approach the task wearing the correct hat. Whether they were acting on behalf of the seller or assisting a buyer’s  agent, they were always representing the firm under contract with the client being assisted.

The new pay-per-showing platforms often expand the pool to agents who are not affiliated with the same firm. This can create unique conflicts. These platforms typically restrict users’  actions and disclosures as part of the basic terms of service. Furthermore, these companies likely require agents to expressly waive any procuring cause claim as part of accepting a showing and being compensated for their time as a showing agent.

These services raise questions, including but not limited to: (1) what duties does a broker owe the prospective buyers if they have knowledge of material facts on the home they are  showing; (2) what duties does the broker owe both parties to the transaction if the broker has knowledge of the property gained by the fact that the listing agreement is with the showing agent’s firm, but the buyer is represented by another firm; and (3) what potential liability is there if the prospective buyer claims the showing agent missed material facts that should  have been obvious to a reasonable agent showing the property?

These questions create clear conflicts that firms will need to address. A firm wishing to implement policies to limit how agents utilize these services or become a provider on these  platforms have the options of fully restricting agent participation or limiting the circumstances the firm’s agents can participate or advertise to users. Further, the firm should review the terms of service or policies of each platform before determining whether they want their agents to participate with specific platforms. Finally, any policies adopted by the firm should be  clearly stated, in writing, to its agents.