Ways to improve professionalism

What was she thinking…

REALTOR® Jane Jones couldn't show a property on the day and at the time her client wanted to see it. Since her client was a longtime client, she knew her client well. Jane gave the lockbox combination to the property to her client and told her client to let himself in. She reminded her client to make sure all the doors were locked when leaving.

The listing agent just happened to be showing the property immediately before Jane was scheduled to show the property and met Jane's client. The listing agent asked Jane's client where Jane was, and the client explained that she couldn't make it but gave him the combination. Oh no! The listing agent filed an ethics complaint with the Board of Realtors alleging that Jane violated Article 1 of the Code of Ethics as exemplified by Standard of Practice 1-16.  Which states: Realtors® shall not access or use, or permit or enable others to access or use, listed or managed property on terms or conditions other than those authorized by the owner or seller.

Jane was also reminded that if you are running ahead of schedule, late or decide not to show the property, please contact the listing agent by phone, text and/or email so the seller can be notified, and never give the combination to a property to anyone.

REMINDER TO ALL:
For those using electronic keys and lockboxes, it is important to remember the Keybox Service Rules and remember that NO Keyholder may enter a property without the listing broker’s permission.  Keyholders must adhere to showing instructions set forth by the listing agent.  Such instructions may be obtained directly from the listing broker’s firm or through the showing instructions listed in the MLS for each property. Failure to comply with the Keybox Service Rules could result in a fine.
 
It is also important to remember that under no circumstances should agents pass keys on to their buyers until either the closing is completed or there is a written agreement between the parties to grant access to buyers prior to closing. 

 

What was Bob Thinking… 

Disclosure of Existence of Offers to Prospective Purchasers

Senario: Seller Sally listed her home for sale with Realtor® Bob. The property was priced reasonably and Realtor® Bob was confident it would sell quickly. The listing agreement included the seller’s authorization for publication in the MLS and authority to disclose the existence of offers to prospective purchasers.  Within days, Realtor® Bob had shown the property to several prospective purchasers and one of them, Buyer Zachary, wrote a purchase offer at close to the asking price.

Realtor® Bob called Seller Sally to make an appointment to present the offer. After hanging up with Seller Sally, Realtor® Bob received another call, this time from Realtor® Alan. Realtor® Alan explained that he represented a buyer who was interested in making an offer on Seller Sally’s property. Realtor® Alan explained that while his buyer-client was quite interested in the property, price was also a concern. He asked Realtor® Bob if there were other offers on the property, indicating that his buyer-client would likely make a higher offer if there were competing offers on the table. Realtor® Bob responded telling Realtor® Alan, “That’s confidential information. Please tell your client to make his best offer.”

Taken aback by Realtor® Bob’s comments, Realtor® Alan shared them with his buyer-client, who chose not to make an offer and instead pursued other properties.

Buyer Zachary’s offer was accepted by Seller Sally later that evening and, sometime later, the transaction closed.

Several months later... Seller Sally and Realtor® Alan met at a social event. Realtor® Alan related his conversation with Realtor® Bob. Seller Sally asked Realtor® Alan if he thought that Realtor® Alan’s buyer-client would have made an offer on Seller Sally’s home absent Realtor® Bob’s refusal to disclose whether there were other offers pending. Realtor® Alan responded that it was impossible to tell for certain, but his buyer-client had certainly not been favorably impressed by Realtor® Bob’s response to a seemingly routine question.

Seller Sally subsequently filed an ethics complaint against Realtor® Bob alleging violation of Article 1 as interpreted by Standard of Practice 1-15. She noted that she had clearly authorized Realtor® Bob to disclose to buyers and cooperating brokers the existence of pending offers and that Realtor® Bob’s arbitrary refusal to share information he was authorized to share could have been the reason, or part of the reason, why Realtor® Alan’s client had chosen not to make an offer on Seller Sally’s home.

Realtor® Bob defended his actions indicating that while he agreed that he had an obligation to promote Seller Sally’s interests, his obligation to Realtor® Alan and to Realtor® Alan’s buyer-client was simply to be honest. He had not, in any fashion, misrepresented the availability of Seller Sally’s property. Rather, he had simply told Realtor® Alan to encourage his client to make her best offer. “I’m not required to turn every sale into an auction, am I?” he asked rhetorically. “I feel that I treated all parties honestly and fairly,” he concluded.

The Hearing Panel did not agree with Realtor® Bob’s reasoning, indicating that he had violated Article 1 as interpreted by Standard of Practice 1-15. They noted that Standard of Practice 1-15 requires Realtors®, if they have the seller’s approval, to divulge the existence of offers to purchase on listed property in response to inquiries from either potential buyers or from cooperating brokers. Realtor® Bob had not met that obligation and, consequently, the Hearing Panel concluded that Realtor® Bob had violated Article 1. (NAR Case Study 1-28 Adopted November, 2002)

 

What Was Jane Thinking? 

Senario:
To Put Under Deposit or Not to Put Under Deposit… That is the question…
REALTOR® Jane Jones received an offer from REALTOR® Tim Thompson. REALTOR® Tim tells REALTOR® Jane that he will deliver the check when the offer is accepted. REALTOR® Jane presents the offer to her sellers and they accept it. She sends the signed contract to REALTOR® Tim who tells her he is out of town for two days and will deliver the check to her office immediately upon his return. REALTOR® Jane decides to keep the listing active in the MLS , but does not make other agents aware that there is already a signed contract and continues to show the property and even receives another offer.

What was she thinking?
There are some agents (and even brokers) that confuse when a property is actually "under deposit" with when they collect the deposit check. It is the signing and delivery of the contract that determines the status of the property.  Legally, once you have a signed contract that property is under contract whether or not the check has been turned over.  The contract is a promise to deliver the check.

Section 5.6 of the SmartMLS Rules and Regulations state that status changes, including final closing of sales, shall be reported to the MLS by the listing broker within 48 hours after they have occurred. Therefore, don't wait for the agent to deliver the check to change the status.

In addition, Section 4(a) of the GHAR Real Estate Purchase Contract states that the buyer has made a deposit to be applied to the total purchase price, subject to collection. Meaning the buyer’s agent should have the check in hand.  Section 6 stipulates Time is of the Essence with respect to payment and states that if any deposit payable is not paid when it is due, and if such failure shall continue for a period of 3 calendar days thereafter, the seller has the right to declare the buyer in default and terminate the contract.

This does not mean the buyer’s agent has 3 days to deliver deposit checks. The checks are due at time of contract for initial deposits and on the due date stated in the contract for second deposits.  If these dates are missed, the buyers are technically in default.  Section 6 provides 3 days for the buyer to cure the default.

 

Senario:
REALTOR® Jane Jones encouraged the owner of her new listing to sign a “Withhold from MLS” form that would keep it off the market for a couple of weeks. She was hoping to sell it to her own buyer. Sometimes she uses “Coming Soon” the same way and shows property to her own buyers prior to the activation date. Have you ever done this?

Jane was thinking she could make more money. 

What Jane missed: Withhold from MLS

For Withhold from MLS, no agent can be denied an opportunity to show the property. That amounts to:

  1. Telling buyers they have no right to hire buyer agents, which interferes with agency relationships
  2. It goes against public policy and reduces competition, which could yield a higher price for the seller

 

What Jane missed: Coming Soon status

The intent of the Coming Soon status is to allow the listing agent to market the property before it is ready to be shown.  Under NO circumstances can exceptions be made to show the property prior to the activation date in the MLS, nor can the activation date, once chosen, be moved to an earlier date.

Holding listings off the MLS should be for reasons beneficial to the seller NOT to the listing agent.

Professionalism tip: Don't be like Jane. An agent cannot encourage a seller to keep the property off the market in order to increase the chances of a double commission, nor should an agent encourage a seller to sign an agreement with that intent.