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REAL ETHICS by Steve Stazel | May 2009 | Index of all Real Ethics columns
To divulge or not to divulge…that is the question
Here is your ethics question of the day. Please circle the proper answer.
In one day you receive offers on your listing from two different buyers, each working with a different broker.
You should:
A. Tell both brokers they are competing.
B. Tell both brokers the offering price of the other offer.
C. Don’t disclose to any broker the existence of the other offer.
D. Do whatever your seller tells you to do.
Which answer did you choose? The correct answer is D.
Standard of Practice 1-15 states that: “REALTORS® in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, divulge the existence of offers on the property.”
Notice the words “with the sellers’ approval.” They make it our obligation to ask the seller how he or she wants us to handle multiple offers. The seller may want you to tell competing brokers of the existence of other offers, believing this will result in higher offers.
Or the seller may say, “No, don’t tell. We put in an offer on a house three years ago and the next day the listing broker told us there was another offer on the property. We withdrew our offer. I think potential buyers of our house would withdraw their offer, just as we did, if they knew they were competing, so don’t disclose.”
Isn’t this a decision the principal – and not the agent – should make? The listing broker can certainly share with the seller the broker’s thoughts on what to do. However it is the seller’s ultimate decision.
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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