Risk Management Starts Before the Complaint: Practical Lessons for South Carolina REALTORS®

Risk management in real estate does not begin when a complaint is filed or a transaction goes wrong. It begins much earlier—with the everyday decisions REALTORS® make when preparing documents, communicating with clients, negotiating offers, advertising property, and maintaining transaction files.

Here are several practical risk-management lessons South Carolina REALTORS® can incorporate into their businesses.

1. Put It in Writing—and Get It Right Before Moving Forward

In a fast-moving transaction, it can be tempting to treat paperwork as something to clean up later. South Carolina license law makes documentation part of the transaction itself.

Under S.C. Code § 40-57-135, licensees must prepare offers in writing and promptly present them to the seller. Once written acceptance is obtained, true executed copies must be promptly delivered to the parties. The statute also requires the terms and conditions of the transaction to be included in the offer.

Changes during negotiations deserve particular attention. South Carolina law requires changes or modifications made during negotiations to be in writing and initialed and dated by both parties before proceeding with the transaction. The statute also recognizes electronic signatures, initials, and handwritten or typewritten modifications transmitted through secure electronic means.

Risk-management takeaway: Slow down before hitting “send.” Review the document for completeness, make sure negotiated changes are properly documented, and promptly provide the appropriate parties with executed copies. Do not rely on an informal conversation to fix incomplete paperwork later.

2. Know Who You Represent—and Protect the Relationship

S.C. Code § 40-57-350 provides that a brokerage firm serving a client through an agency agreement owes duties including loyalty, obedience, disclosure, confidentiality, reasonable care, diligence, and accounting.South Carolina law also requires a meaningful explanation of available brokerage relationships and the Commission’s Disclosure of Brokerage Relationships form at the first practical opportunity after substantive contact. Importantly, an agency relationship does not arise merely because someone begins working with a licensee; the agency relationship must be established in writing.

Confidentiality becomes especially important during negotiations. Information about a client’s motivation, negotiating strategy, willingness to accept less, or willingness to pay more can materially affect the client’s position. South Carolina law specifically protects several of these categories in dual-agency situations.

Risk-management takeaway: Before disclosing information during negotiations, ask two questions: Who do I represent, and am I authorized to disclose this information? Helping a transaction move forward does not eliminate your agency obligations.

3. Complete Agency and Compensation Agreements Carefully

South Carolina law requires listing and buyer representation agreements to be in writing and to contain the material terms of the agency relationship. Among other requirements, the agreement must address compensation, how and when compensation is earned, the duration of the relationship, and the signatures of the parties.

The practical lesson is simple: do not leave important compensation terms for later.

Compensation discussions should also remain client-focused. Avoid presenting a particular fee as “standard,” “normal,” or automatically required. Instead, explain the available options and help the client understand how different transaction terms may affect the client’s objectives.

For sellers in particular, remember that the contract price is not the same thing as net proceeds. Transaction expenses and negotiated terms can affect what a seller ultimately receives.

SCR recommends REALTORS® to discuss the marketing expenses and seller’s desired net proceeds when discussing pricing strategy.

Risk-management takeaway: Explain the options, properly document the client’s agreement, and keep the client’s overall financial and transactional objectives at the center of the discussion.

4. Social Media Is Still Advertising

A property does not stop being subject to South Carolina advertising requirements because the advertisement appears on Instagram, Facebook, TikTok, or another digital platform.

S.C. Code § 40-57-135 provides that a licensee who is not associated with the listing brokerage may advertise another person’s real estate only with written authorization from the listing brokerage firm, and the advertising must clearly and conspicuously acknowledge the listing brokerage. The statute also contains identification requirements for advertising real estate services and property through electronic media.

That makes “I was just reposting it” a risky mindset.

Before using another brokerage’s listing in a social media post, video, advertisement, or other marketing content, confirm that the required authorization exists and that the content properly identifies the listing brokerage.

The same preventive mindset applies before marketing property as your own listing. Verify the brokerage’s authority to advertise the property and keep the appropriate documentation in the transaction file.

Risk-management takeaway: Verify first. Post second.

5. Your Broker-in-Charge’s Policies Matter

Risk management is not solely an individual licensee responsibility.

South Carolina law places significant supervisory responsibilities on the Broker-in-Charge, including supervising licensees, reviewing and approving contractual and disclosure forms routinely used by the brokerage, maintaining appropriate contact with supervised licensees, and establishing a written office policy.

The current law also places specific responsibilities on Brokers-in-Charge regarding offers and counteroffers, including ensuring that they are in writing, dated and signed by the offerors, promptly presented, and appropriately documented throughout negotiations.

For licensees, that means brokerage policies should not be treated as paperwork sitting in a manual somewhere.

Risk-management takeaway: Know your brokerage’s written policies, follow established procedures, and involve your Broker-in-Charge when an issue falls outside your authority or experience.

6. Artificial Intelligence Does Not Shift Responsibility Away From the Licensee

AI can assist REALTORS® with marketing drafts, communications, organization, and other tasks, but South Carolina law places responsibility for the resulting work squarely on the licensee.

S.C. Code § 40-57-820 provides that a licensee is responsible for work product produced by the licensee or with the assistance of artificial intelligence, machine learning, or similar programs. If the resulting work violates the Real Estate Practice Act, the violation is treated as though the licensee committed it directly.

Risk-management takeaway: AI may assist with the work, but it does not assume responsibility for the work. Review AI-generated content for accuracy, confidentiality, compliance, and appropriateness before sending or publishing it. Do not place confidential client information into an AI tool without considering your legal, brokerage, and privacy obligations.

Build Prevention Into Your Practice

SCR encourages licensees to check their work, create and follow procedures, communicate clearly in writing, maintain records, and stay current on license-law developments.

Those habits matter because a transaction file may eventually need to tell the story of what happened without the benefit of everyone’s memory.

Before moving to the next transaction, ask:

• Is the document complete?

• Is the agreement or change properly documented?

• Does the file show what was communicated and when?

• Am I acting within my role and authority?

• Have I protected confidential information?

• Does my advertising comply with license law and brokerage policy?

• If I am unsure, have I stopped and asked my Broker-in-Charge before proceeding?

The goal of risk management is not merely to respond well after a problem arises. The better approach is to build practices that help prevent the problem in the first place.

By India Whaley, Esq.

Posted by: Byron King on 10/20/26 (This information is only accurate as of 10/20/26. You must contact SCR for updates and changes to this information after 10/20/26, as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org or email byron at screaltors.org

This information is not legal advice. This information is intended only to provide general information and may not be relied upon as specific legal guidance. Legal counsel should always be consulted before acting in reliance on this information.