Virtual Showings: Buyers and Their Brokers' Considerations

In a previous post we discussed some sellers' concerns related to the possibility of 'virtual showings,' where buyers' agents come to listings, take photos, make video recordings, or even live-stream tours, all to permit potential buyers, not physically present, to get a look at a listed property—and perhaps even buy it! Here, we consider the concerns of buyers and their respective brokers.

Buyer's brokers' risks to consider

From the buyer's broker perspective there are several aspects of virtual showings to consider, including health, technology, and legal concerns. This post is not legal advice and assumes that virtual showings and open houses are conducted in a manner compliant with all applicable federal, state, and local orders and restrictions.

For buyers' brokers, the health concerns are similar to sellers. Brokers and agents may wish to take measures to protect themselves while virtually showing a property (see the CDC's recommendations here) against transmitting or acquiring pathogens. Any buyer touring a property would likewise have similar concerns. Most of the other concerns on the buyer side are legal in nature.

Permission and privacy

As a preliminary matter, buyers' brokers and agents must determine whether they can make media for virtual showings at all and whether they can freely distribute the media. Individuals have a reasonable expectation of privacy in their own homes. Buyers' agents physically present on someone else's property must have permission to be there (or trespass, which is not recommended).

Typically, permission to enter the property is provided via scheduling a showing appointment (often through the MLS) with the listing broker. If permission is conditioned on the buyers' broker NOT making media, then the buyers' agents cannot make media. If it is conditioned on buyers' broker not allowing distribution of media beyond the buyers themselves, then the buyers' broker must not allow that distribution. The consequences of violating these strictures depend a great deal on how the buyers' brokers learn of them—whether in a notice on MLS, a special contract for accessing the property, or some other means.

Distribution considerations

Next, buyers' brokers must consider whether they have the necessary means to distribute media to their buyers or beyond, meaning what media channels and technology platforms to use. Additionally, they may want to know whether others can make use of their media, too. Brokers should be familiar with the end-user license agreements of any platforms they plan to use to create and share media resulting from a virtual showing. If the platform can use the media in a way not permitted by the seller (e.g., public distribution or creation of derivative works), the buyer's broker could be in hot water.

Buyers' brokers must understand the technology well enough not to distribute media accidentally. For example, doing a virtual showing using Facebook's live streaming technology might work well for buyers and their brokers, but in that case, the broker should be sure they have selected the audiences to whom the stream is visible. They could otherwise end up violating the seller's requirements or publicly embarrassing their buyers. Live-streaming poses additional risks because of its live nature, meaning that it can't be edited before distribution. Buyers' brokers should understand who will be in the home during a virtual showing, and everyone should plan to be on their best behavior.

Buyer's broker should also understand the output of the platform. Will the use of a particular platform allow the broker to brand the media in a way consistent with their firm's other materials? Note that if the media will be submitted or distributed through the MLS then the MLS may have certain rules regarding media standards and branding.

Copyright and intellectual property considerations

Buyers' brokers also have legal rights in the media they create. Photo and video recordings have long been deemed "works of authorship fixed in a tangible [digital] medium of expression" and thus are subject to copyright. Live-streaming, a relatively new technology, is subject to copyright too. The creation of a live-stream results in the immediate creation of multiple copies of the recording. These copies are necessary for the distribution of the live-stream to multiple platforms across the broader internet. So, any persistent copies of live-streamed video are subject to the author's copyright (this will probably be the agent unless the broker acquires copyright ownership in their independent contractor agreements with their agents, see here for more details on "Who owns the listing content").

If the media is subject to copyright, then others may not use that media without the copyright-owner's permission. Stated another way, if brokers want others to be able to use their media, then they need to grant a license for that use. For buyers' brokers, there is likely an implied license upon distribution to her buyer client. Also, if the video or live-stream is submitted or distributed via the MLS, then the typical MLS licenses are granted (i.e., those described in MLS's rules and participant/subscriber agreements). Of course, there are many potential exceptions and situations where others can use the media content depending on the circumstance, and this post cannot cover all the ground of copyright law. The key point is that copyright considerations will be in play for media created for or from virtual showings.

Defects in the property

One last matter that may be of interest to sellers, buyers, and brokers from both sides: Does the use of virtual showings change the legal standards for the discovery of defects? In many states, a buyer may recover against a seller if, after closing, the buyer asserts that she has suffered some harm due to a defect in the property that the seller did not disclose. In some states, there is no such liability for 'obvious defects,' ones that any reasonable buyer should have seen upon reasonable inspection before purchase. Visiting a property via live-streamed video or virtual tour, however, could make it more difficult for the buyer to detect and assess defects than being there in person. It is possible that the legal standard for obvious defects may evolve in the coming years to reflect these changing market conditions.

Meanwhile, buyers might have to repose more trust in their brokers, who might need to be more concerned about liability as a result. Buyers might be upset by a larger range of defects, because they might not see them until moving in, raising potential concerns among sellers and buyers' brokers about liability flowing their way. All parties to the transaction might wish to ensure the buyer pays for a third-party inspection before making an offer. While a virtual showing might be a viable preliminary option, there's a good likelihood that buyers will still want to see the property in person prior to purchase.

Resources

Of course, there may be other aspects of virtual showings that are of concern to buyers or their brokers that we didn't address above. If you're looking for more guidance and resources on virtual showings, check out NAR's resources here, here, and here, and CMLS's resources here.

To view the original article, visit the MLS Tesseract blog.