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REAL ETHICS by Steve Stazel | February 2009 | Index of all Real Ethics columns
Another ethical dilemma
REALTOR® Kruger had 123 Elm St. under contract for $50,000 less than list price. The contract eventually failed. Soon thereafter, the listing expired and the seller made the descision not to sell. Several weeks later, REALTOR® Kruger was working with a buyer (as a buyer’s agent) who might be interested in the house on Elm Street. REALTOR® Kruger obtained permission from the seller to show the property to his buyer.
Here is the question: Can or should REALTOR® Kruger tell the buyer that the seller will accept $50,000 less than the asking price? What do you think?
Before reading any further, stop and really think about how you would answer the question.
Does REALTOR® Kruger have any remaining responsibility to the seller? Since there is an agency relationship with the buyer, should the buyer be told about the previous transaction? What if REALTOR® Kruger was a transaction broker? Would that change anything? Would it matter if REALTOR® Kruger had originally been an agent or transaction broker for the seller?
Here is one of the reasons that being a REALTOR® is so important to us. The Code of Ethics addresses this dilemma. It gives us guidance in a situation such as the above.
Standard of Practice 1.9 of the Code states that “The obligation of REALTORS® to preserve confidential information (as defined by state law) provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any non-agency relationships recognized by law.” (Because of space limitations, your author has eliminated a portion of Article Nine. You may want to go to the Code and read the entire article.) An exception is latent material defects. The last sentence of Article Nine states that “Information concerning latent material defects is not considered confidential information under this Code of Ethics.”
You may have noticed the words “as defined by state law” in Standard of Practice 1.9. What does Colorado have to say about this? Colorado statute 12-61-809 (2) (a) and (b) and (3) cover this. The Code of Ethics and Colorado Law are in agreement.
Each month, the Aurora Outlook features RealEthics, a column by Steve Stazel devoted to explaining Code of Ethics issues for members. The comments stated in this article are those of the author and do not necessarily represent the views of the National Association of REALTORS®, the Colorado Association of REALTORS® or the Aurora Association of REALTORS®. Ultimately, a hearing panel of the Professional Standards Committee determines whether a violation of the Code of Ethics has occurred on a case-by-case basis. These comments should not serve as the foundation of any ethics complaint, arbitration request or response.
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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