Dear Anne: Listing Agents Please Take Care
Listing shortages lead to some disconcerting behavior. Sellers have tremendous leverage in this intense seller’s market, but the Code of Ethics applies during all types of markets. Still, a handful of listing agents take advantage, simply because they think they can get away with it.
ORLANDO, Fla. – Dear Readers: I realize inventory is in short supply, but some of the stories I’ve been hearing lately are disconcerting, and I wanted to share them with you.
First scenario: A listing agent who is also the seller told a buyer that they don’t have a chance to secure his property unless they dump their agent and work with him.
I would like to remind this listing agent about Standard of Practice 1-1, which says, “Realtors® when acting as principals in a real estate transaction remain obligated by the duties imposed by the Code of Ethics.”
Granted, as the seller, the agent can waive the submission of the offer. However, if the agent is not the sole owner of the property, a hearing panel could hold the agent to the obligation to present all offers to the co-seller unless the co-seller waives his/her right in writing. I must admit I’m curious on how a hearing panel would land on that one.
However the seller/agent is bound under the precepts of Article 3 which says, Realtors shall cooperate unless it isn’t in the best interest of your client. The agent could argue that he is his own client and cooperating with the buyer’s agent isn’t in the seller’s best interest. But again, if there is a co-seller involved … hmmm?
In my book, threatening a buyer is unprofessional. The agent in this case could suffer from a fate worse than being found in violation of the Code, and that is a tarnished reputation. I realize saving money is important, but at what cost? A good business reputation is the gift that keeps on giving – and a bad reputation rarely has a happy ending.
Second scenario: A listing agent told an out-of-town agent, “If you want your buyer’s offer presented, I’m the one who will work with the buyer and you’ll get a referral fee.”
Oh, this crosses the line! Standard of Practice 1-7 says listing brokers are to submit ALL offers until closing or the execution unless the seller/landlord waives this obligation in writing. The seller hired the listing broker to sell the property, not get territorial.
Article 1 is about protecting and promoting your seller’s best interest. The question is: Whose best interest is the agent promoting and protecting?
I have written about this before, so maybe it’s time for a refresher. Per Standard of Practice 3-1, “…Unless expressly indicated in offers to cooperate [verbal, written, MLS or MLS Advantage], cooperating brokers may not assume that the offer of cooperation includes an offer of compensation.” Can’t get any plainer that that. The “so you’re not from here tactic” could get the listing agent two articles behind his name, Articles 1 and 3. If money is the issue, only requests for arbitration based on the offer of compensation made in some form: verbal, in writing, in the MLS or through MLS Advantage could make it to arbitration.
Third and final scenario: A listing agent says “If your buyer doesn’t work through me, I’m only going to pay you half the commission offered in the MLS.”
We’re back to Article 3 again, but focusing on Standard of Practice 3-2, any change in compensation offered for cooperative services must be communicated to the other Realtor prior to the time that Realtor submits the offer.
If the change is made after the offer is submitted, this could be a violation. If the change is made before the offer for purchase is submitted, it would not be. MLS rules also come into play. If the listing broker is going to offer a different commission from the rest of the participants, it must be communicated in writing in advance of the submission of the offer. It also goes on to say this modification is not the result of any agreement among all or any other participants in the service.
Listing brokers do not like it when a buyer’s agent holds the buyer’s offer hostage until the listing broker agrees to more commission than is offered, so why would a buyer’s agent want to hand over the buyer to earn nothing or a referral fee so the listing agent can pocket more money?
These scenarios fly in the face of the spirit of cooperation. Cooperation is some awesome sauce, and the best in this business swear by it. If everyone works together, everyone benefits. Enough said.
Anne Cockayne is the former Director of Local Association Services for Florida Realtors
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