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REAL ETHICS by Steve Stazel | Mar
2006 | Index of all Real Ethics columns
We Have An Obligation To Other REALTORS® Not To Waste Their Time
The case that follows is an actual case from the National Association of REALTORS® (NAR) Ethics and Arbitration Manual.
REALTOR® A listed Sellers S’s house for sale and submitted it to MLS. REALTOR® X procured a full price offer from Buyer B. The offer was contingent on the sale of Buyer B’s house. Seller S accepted the offer but instructed REALTOR® A to continue marketing the property in hopes that an offer that was not contingent on the sale of an existing home would be made.
A week later, REALTOR® Q, working with an out-of-state transferee on a company-paid visit, contacted REALTOR® A to arrange a showing of Seller S’s house for Buyer T. REALTOR® Q set the showing and was told nothing about the previously accepted purchase offer.
REALTOR® Q showed the property to Buyer T and Buyer T signed a purchase offer for the full listed price. REALTOR® Q left the purchase offer at REALTOR® A’s office.
REALTOR® A Informed Seller S about this second offer. At Seller S’s instruction, Buyer B was informed of the second offer, and Buyer B waived the contingency in his purchase offer. REALTOR® A then informed REALTOR® Q that Seller S and Buyer B intended to close on their contract and the property was not available for purchase by Buyer T.
REALTOR® Q believed that REALTOR® A’s failure to disclose the existence of the accepted offer between Seller S and Buyer B at the time REALTOR® Q contacted REALTOR® A was in violation of Article 3 of the Code of Ethics, as interpreted by Standard of Practice 3-6. REALTOR® Q filed an ethics complaint with the local association.
At the hearing, REALTOR® A defended his actions, noting that while Buyer B’s offer had been accepted by Seller S, it had been contingent on the sale of Buyer B’s current home. It was possible that Buyer B, if faced with a second offer, could have elected to withdraw from the contract. REALTOR® A argued that continuing to market the property and not making other brokers aware that the property was under contract promoted his client’s best interests by continuing to attract potential buyers.
“Nay Nay,” said the hearing panel, pointing to the specific wording of Standard of Practice 3-6 which requires disclosure of accepted offers, including those with unresolved contingencies. REALTOR® A was found in violation of Article 3.
We have an obligation to other REALTORS® not to waste their time and the time of their buyers. Always accurately describe the status of your listing to cooperating brokers.
Each month, the Aurora Association of REALTORSŪ Web site features Real Ethics,
a column by Steve Stazel devoted to explaining Code of
Ethics issues for members. A REALTORŪ since 1974, Stazel is a Professional Standards
instructor and senior Ethics
instructor for the Colorado Association of REALTORSŪ.
If you have an ethical concern or an issue you would like
to see addressed, please call Stazel at (303) 773-3333 or e-mail him at
stazels@msn.com. The comments of this article reflect the understanding and
opinions of the author and do not represent an official expression of policy by the National Association
of REALTORSŪ.
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