Promote Seller’s Best Interest
When a Listing Broker took the listing, the Seller made it very clear what price they wanted the property to be listed and sold. After weeks of marketing the property, the Listing Broker concluded the property was overpriced. The Listing Broker shared this opinion with their sales team but failed to share with the Seller. Was this a violation of the Code of Ethics?
Dear Shannon: I took a listing from a seller who was adamant they wanted a particular price for their property, and I was instructed to list it for that price. At the time, I thought it sounded like a fair price for the property, so I took the listing. Over the next several weeks I diligently marketed the property with no response and showed it to a few prospective buyers who lost interest when they learned the price. I let our sales team know that the seller insisted on the list price, but it was clear to me the property was overpriced since there had been no offers and so few showings.
Weeks later, without word from me, the seller called my office without introducing themselves and asked about their own property. One of the sales associates said it was still on the market but had heard at a sales meeting that it wasn’t getting much activity because the price was too high. The seller filed a complaint against me, claiming I failed to promote their interests and failed to advise them of my opinion that the price was too high and failing to actively seek a buyer[AC1] . At the professional standards hearing, I explained the seller insisted on the price for their property; that with almost no response I was forced to conclude that it would not sell for the listed price; and that because the seller was so adamant about the price I felt it was useless to try to get the seller to agree to a lower listed price. How, then was I possibly found in violation of Article 1 of the Code of Ethics, when I thought I was Following Seller’s Wishes?
Dear Following Seller’s Wishes: Thank you for reaching out. I see where you thought you were just following the seller’s wishes. Certainly, when you took the listing, you were following the seller’s wishes to list the property at the price the seller wanted. But something changed, and when the seller filed an ethics complaint against you, it sounds like the Professional Standards Hearing Panel found you violated Article 1 of the Code of Ethics. Let’s take a closer look at the language of Article 1.
Article 1 falls under the category of Duties to Clients and Customers. It states; When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve Realtors® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, Realtors® remain obligated to treat all parties honestly. (Amended 1/01)
You have duties that you owe to your seller, and under Article 1 those duties include pledging yourself to protect and promote the interests of your seller, as well as treating your seller honestly. In your case, you took a listing at a price determined by the seller. Then you worked diligently to market the property with little interest. Based on the feedback you received from potential buyers about the price being too high combined with the lack of interest, you concluded the property was overpriced. You shared this information with your sales team, but you did not share this with the seller. The seller had to call your office to find out information about their property.
You didn’t communicate with your seller about your efforts to sell their property, and you didn’t share your opinion that the price was too high because you thought it would be useless to try to get the seller to reduce the price, they had been so adamant about when you took the listing. Unfortunately, it was a failure in your obligations under Article 1 to not advise the seller of your conclusions that the property was overpriced, based on responses to your sales efforts because this does not promote the interest of your seller. In addition, you withheld information from the seller regarding your best efforts to bring about a sale of the property which would be in the interest of your seller. Unfortunately, your withholding important information from your seller on the high price of their property does not promote the interest of the seller and is a violation of the Code of Ethics.
Inspired by Case #1-5: Promotion of Client’s Interests. Other laws and rules may apply.
Shannon Allen is an attorney and Florida Realtors Director of Local Association Services
Note: Advice deemed accurate on date of publication
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