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REAL ETHICS by Steve Stazel | October
2006 | Index of all Real Ethics columns
What constitutes “initiation” by a buyer?
Standard of Practice 16-13 states in part that “all dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement, shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client.”
The question then arises, “What constitutes initiation by a buyer?”
Initiation does not occur when a buyer calls on a for sale sign. It does not occur when a buyer responds to an advertisement. More has to happen for “initiation” to occur.
One way “initiation” might occur is if a buyer (who has an agency agreement) asks another broker to write a contract for them. The broker who is asked to write the offer should make several disclosures (preferably in writing).
First, the broker should be sure the buyer understands who the broker represents. Second, it would be prudent to inform the buyer that he/she may be liable to pay their buyer agent a commission (if for some reason the broker who is writing the offer does not plan to pay the buyer’s agent).
Third, it would be prudent for the broker to have the buyer acknowledge that the broker had done nothing to encourage the writing of the offer.
Now how about a RADICAL suggestion? Once the broker has been asked to write the offer, what if he or she CALLED the other broker? Would you appreciate it if you received a call from another broker stating that your buyers wanted to write an offer? Of course you would.
Whenever you see a potential problem, your very best course of action is to nip it in the bud. Communicate with the other broker.
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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