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What Should REALTORSŪ Be Doing Now About the Telemarketing Law?
by Rick Staff and Debbi
Conrad
With the implementation of DATCP's "no call" rule on Jan. 1, 2003,
REALTORSŪ may now need to register as telephone solicitors or adjust their business practices to avoid penalties and possible litigation.
The Legislature set out to regulate and monitor telephone solicitors, but DATCP expanded the definition of "telephone solicitation" so that most business people (including
REALTORSŪ) who make non-exempt telephone solicitation calls must register with DATCP and pay a registration fee. A telephone solicitation is defined by DATCP as an unsolicited telephone call that encourages the consumer to purchase property, goods or services, or a call that is part of a plan or scheme to encourage the consumer to buy property, goods or services. These telephone solicitation calls include not only traditional telemarketing activity, but also many telephone calls a
REALTORŪ makes to his or her clients or customers, such as calls to remind them to order the septic test required by the offer contingency or to obtain an insurance binder for closing.
No agent can legally make a telephone solicitation call unless the broker is registered with DATCP as a telephone solicitor or the purpose of the call is exempt.
Step #1. All REALTORSŪ Should Make Their Transactional Calls Exempt
Brokers should confer with their attorneys and take steps to make sure that their follow-up and closing preparation calls to their clients and customers are not classified as telephone solicitations. In other words, brokers should make their follow-up and closing preparation calls fit into one of the exceptions to the definition of telephone solicitation. These exceptions include:
- Calls made in response to the consumer's request for that call. Brokers may, after conferring with legal counsel, consider inserting language into all new and existing agency agreements and agency disclosures (starting immediately) to the effect that: "(Seller) (Buyer) requests but does not require broker to telephone (seller) (buyer) regarding issues, goods and services related to the real estate transaction. This request will terminate at such time as broker is no longer providing brokerage services to (seller) (buyer)."
- A telephone call made to a current client. A current client is a person who has a current agreement to receive, from the caller or the person on whose behalf the call is made, property, goods or services of the type promoted by the telephone call.
REALTORŪ Perspective: Tinkering with the definition of clients and client services, as those concepts are employed under real estate license law is a possibility, but may prove difficult and confusing. It may be necessary to list goods, services and tasks (telephone calls) that are being embraced as part of client services.
- A telephone call encouraging the call recipient to buy property, goods or services from a nonprofit organization unless sale proceeds are subject to Wisconsin sales tax or federal income tax.
REALTORŪ Perspective: REALTORŪ firms and companies are not nonprofit organizations
- A telephone call made by an individual acting on his or her own behalf, not as an employee or agent for any other person. This exemption does not apply to a caller who does any of the following: (a) sells or promotes the sale of property, goods or services for others, or (b) sells or promotes the sale of goods that the caller buys from another person who controls or limits the caller's sales methods.
REALTORŪ Perspective: If taken literally, most REALTORSŪ "sell or promote the sale of property, goods or services for others," so reliance upon this exemption should be undertaken only with caution and only upon the advice of company legal counsel.
- A telephone call made to a number listed in the current local business telephone directory.
REALTORŪ Perspective: This may be a viable option for commercial brokers but obviously does not generally benefit residential brokers
- One telephone call to determine whether a former client mistakenly allowed a contractual relationship to lapse.
REALTORŪ Perspective: This type of call may be made by
REALTORSŪ under those limited circumstances.
- A telephone call made to determine a former client's level of satisfaction, unless the call is part of a plan or scheme to encourage the former client to purchase more property, goods or services.
REALTORŪ Perspective: This type of call may be made by
REALTORSŪ under those limited circumstances but requires caution because there is a risk of the call later being classified as a telephone solicitation if it is deemed to be part of a scheme or plan to sell.
- A telephone call made to a party to an existing contract that is necessary to complete the contract.
REALTORŪ Perspective: This exemption may apply to calls a
REALTORŪ makes to the seller or the buyer regarding a listing contract or buyer agency agreement, as long as care is taken to limit the conversation to tasks needed to fulfill the contract or agreement. Note, however, that the
REALTORŪ is not a party to the offer to purchase and therefore this exception does not extend to calls made to complete the terms of an offer to purchase.
Step #2. If Your Agents Do Cold Calling, Register with DATCP as a Telemarketer
Brokers who allow or require cold calling will not be able to escape DATCP's telephone solicitation registration requirements and fees. They should contact DATCP as soon as possible at (608) 224-4999, (608) 224-4939 (fax), or
https://nocall.wisconsin.gov/web/includes/help/telemarketerfaq.asp) to register and pay their fees. If the broker or company is registered, then the agents can make "telephone solicitation" calls as long as the telephone numbers called are not on the "Do Not Call" list.
Step #3. If Registered as a Telemarketer, Observe the Do Not Call List Restrictions
Brokers that have registered with DATCP as telemarketers will receive the Do Not Call list. No agent may make a telephone solicitation call to any telephone number on the Do Not Call list, even if an agent is making a follow-up call to a party in a transaction, unless the call falls under one of the telephone solicitation exceptions. (See Step #1)
See Legal Update 02.11
for further discussion of the DATCP telephone solicitation rules and a complete list of the exceptions to the definition of a telephone solicitation.
For complete information about the REALTORŪ Perspective of Wis. Stat. § 100.52 and the DATCP telephone solicitation rules: go to the
Telephone Solicitation
REALTORŪ Resource Page. Find the telephone solicitation Legal Update and Hotline Hottips, as well as links to state of Wisconsin resources.
Also find links to other REALTORŪ Resource Pages on a wide range of current real estate hot topics.
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College Scholarships Available
The selection process is now underway for the 2003 Wisconsin
RealtorsŪ Foundation REALTORŪ Children's Scholarship program.
This program awards college scholarships to children of WRA members. The foundation is offering seven scholarships in the amount of $400 each. The deadline for submitting an application is March 14, 2003. The application is available online at
http://www.wra.org/resources/childrens_scholarship.htm
or by contacting Sandy.
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Recruit to Mirror the Market
by Laurie Moore-Moore
Are you ready for the changing face of tomorrow's buyers and sellers?
Yesterday's home buying and selling households might have come right out of the TV series, Father Knows Best. You remember them-dad, a stay-at-home mom, three kids and the family dog. Things have changed.
Today there are more minority and foreign-born households. In addition to this racial and ethnic shift, the mix of household types is changing as well. There are more single female households, more unmarried couples, more childless households, and more households with disabled individuals. The market is changing, but are we responding effectively to the new face of demand?
A recent article in NAR's REALTORŪ magazine, predicted that by the year 2010, 80 percent of first time homebuyers will be immigrant households. Others are predicting that by that same year, 30 percent of all buyers will be minorities.
New segments = New needs
Brokerage companies are beginning to recognize the unique needs of these increasingly important market segments. For instance, The Prudential Florida, has identified their agents who speak foreign languages and published a directory of bi-lingual associates.
Douglas Elliman, a Manhattan-based brokerage firm, is offering its relocation guide to New York City in more than six languages and has identified 25 languages spoken by its associates. This focus on diversity reflects the fact that national growth of the native-born white population is almost stagnant while Asian Americans boast a 5.2 percent growth rate, Hispanics are growing at 3 percent, and African Americans are increasing at 1.6 percent.
Immigration fueling market
Immigration is a major factor in much of this growth and will continue to be. This diversification of America is occurring in major markets and in small ones, in the middle of the country and on the coasts. While Asian populations are growing in Lincoln (NE), immigrants from the former Soviet Union flow into Dallas, Mexicans move into San Diego and Latin Americans fuel Miami's growth. The face of the market is changing as a million new households flow into the U.S. each year from abroad.
Recruit agents from targeted segments
Brokers and agents are beginning to respond to this diverse market by targeting advertising to specific market segments. Century 21's efforts to penetrate the Hispanic market and The National Association of
RealtorsŪ' use of institutional advertising in Spanish are just two examples of this; however, most brokerage firms don't appear to be targeting recruiting efforts at these market segments. Targeted recruiting may be the best way to serve and penetrate these important market niches.
For many minority group members, the cost of housing is not the primary deterrent to purchasing. Instead, it is discomfort with the process. If you don't understand what's involved, or if you face a language barrier, you may be reluctant to even start the real estate process. This doesn't mean that agents can only work effectively with those who match them demographically, it simply recognizes the hesitancy that keeps some prospects out of the market because they are "different" from the agents they encounter.
Our country is changing, yet as I look at real estate groups across the country, I don't see the same diversity. Perhaps one secret to meeting the needs of the emerging market segments is to better reflect the variety of the market in our own offices. It's easy to fall into the trap of doing what we've always done, such as focusing our new agent recruiting on teachers and nurses despite the fact that research tells us that the highest percentage of top agents come from management/administrative or sales and marketing careers.
Today, Ozzie may be Mr. Gonzales and Harriet may be Ms. Nguyen. The names and demographics may be different, but our goal is to create organizations who continue to meet shifting consumer needs. New resources will yield new energy and talent. Recruiting agents who mirror the very market segments we wish to target can be an effective strategy for ensuring tomorrow's success.
Laurie Moore-Moore is co-publisher of REAL Trends newsletter. Copyright( REAL Trends, Inc., 1999. All rights reserved. For information on Laurie's speaking and consulting services, please contact The Frog Pond Group at 800-704-FROG (3764) or email
susie@frogpondgroup.com
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