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Dear Anne: A Tale of Lost Listings, Commissions and Fairness

Realtor A had a listing, a buyer, and a bona fide offer two weeks after the listing expired. The seller had re-listed by then, but A contacted the seller directly, went to closing and earned the full commission. How can the new did-nothing listing agent file a Code of Ethics complaint?

ORLANDO, Fla. – Dear Anne: After a year on the market, my seller had the unmitigated gall to jump ship and relist with my number-one competitor. The new listing went into effect at the stroke of midnight exactly a week after I gave an interested buyer their third tour of the property.

The buyer said they’d make an offer, but as an investment purchase, it would take a few weeks to get all his financial ducks in a row – adequate capital for the purchase and renovations – before we could write the contract.

Two weeks later, his ducks were in a row. I wrote the offer and contacted the seller. We decided to let bygones be bygones, worked together and made the deal happen. At closing, everyone was happy, and I got paid the listing commission.

All was right with the world until I got an irate call from my so-called “successor.” I told him too bad, so sad. He told me I should have submitted the offer through him, and that I violated the Code of Ethics.

I don’t get it, what’s his problem? He had nothing to do with this deal. The listing was mine in the first place. I worked hard for an entire year and spent money marketing the property. Now he’s filed an ethics complaint and an arbitration request to collect his listing fee.

If I am going to be inconvenienced, I might as well make it worth my while and file a counter complaint against him for going behind my back and taking my listing away. I was going to let it drop until the Board requested a response to his ethics complaint. What are your thoughts? –
Signed, Dealmaker

Dear Dealmaker: Well, I must say, it’s certainly all about you. Instead of submitting the offer through the listing broker, you went around the listing broker and pocketed the listing commission.

Article 16 in the Code of Ethics clearly states “REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.

Article 16 is about respect.

Let’s talk about your counter-complaint threat. If the new listing broker went behind your back to initiate contact with the seller, he did not respect your exclusive relationship just as you did not respect his relationship. Talk about fair play? But if the seller was the one who initiated contact? That’s an entirely different matter.

The Code does not place ethical obligations on the consumer unless the consumer is a Realtor. If the consumer decides it’s time to change brokerages, the consumer has every right to engage in a conversation with prospective listing brokers to discuss the terms of a future listing. You may want to get your facts straight before filing a counter-complaint.

I realize this is an inconvenience for everyone, especially you, but it all could have been avoided if you had fulfilled your obligation under the Code.

You may be relieved to learn that arbitration requests between listing brokers is not arbitrable unless the listing brokers agreed to share the commission. This is not the case in your scenario, so more than likely the Board’s Grievance Committee will have no choice but to dismiss the request for arbitration. However, the Board can offer mediation as an informal approach to resolving the dispute.

While you may be disciplined for violating Article 16, the quagmire you’ve created may not stop with an ethics decision. Once the listing broker realizes he cannot arbitrate to collect his commission, he may take the seller to court and the seller may find himself out of pocket for two listing commissions – not something I would want on my conscience.

Anne Cockayne is Director of Local Association Services for Florida Realtors

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