There was a time when a person's word and his / her hand shake meant a lot. They were both binding and had real meaning. Today, with vast global cultural differences, various interpretations of words, lengthy and extremely detailed contracts, a highly litigious society, and some plain-old dishonest people, conducting business on a hand-shake is not only inappropriate, it’s downright dangerous!

Remember that two honest people, with the absolute best of intentions, can easily misunderstand each other and disagree. If this is true, then why do some commercial real estate brokers still conduct business on a hand-shake? Why do they work on behalf of companies to negotiate transactions without so much as a simple document describing the roles of client and service provider? Are they overly trusting? Are they lazy? Is there an advantage to working in this manner?

In many states, a real estate broker working without a document indicating which party he / she represents may be in violation of license law. Such action could subject the licensee to fines, temporary or permanent license suspension, or worse. In other states, the role of a real estate broker, and therefore his ability to serve his customer as intended, may be predetermined by law, irrespective of documentation.