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Time at Which Modification to Cooperative Compensation is Communicated is a Determining Factor
Code of Ethics Case Interpretation
Relating to Article 2 of the Code of Ethics
REALTOR® A listed Seller X’s home and entered the listing into the MLS. The relevant MLS data field indicated the compensation REALTOR® A was offering to the other Participants if they were successful in finding a buyer for Seller X’s home.

During the next few weeks, REALTOR® A authorized several Participants of the MLS, including REALTOR® C, to show Seller X’s home to potential buyers. Although several showings were made, no offers to purchase were forthcoming. REALTOR® A and Seller X, in discussing possible means of making the property more salable, agreed to reduce the listed price. REALTOR® A also agreed to lower his commission. REALTOR® A changed his compensation offer in the field in the MLS and then called the MLS Participants who had shown Seller X’s property to advise them that he was modifying his offer of compensation to cooperating brokers. Upon receiving the call, REALTOR® C responded that he was working with Prospect Z who appeared to be very interested in purchasing the property and who would probably make an offer to purchase in the next day or two. REALTOR® C indicated that he would expect to receive the compensation that had been published originally in the MLS and not the reduced amount now being offered to him, since he had already shown the property to Prospect Z and expected an offer to purchase would be made shortly. REALTOR® A responded that since Prospect Z had not signed an offer to purchase and no offer had been submitted the modified offer of compensation would be applicable.

The following day, REALTOR® C wrote an offer to purchase for Prospect Z. The offer was submitted to the Seller by REALTOR® A and was accepted. At the closing, commissions were dispersed reflecting the modified offer communicated to REALTOR® C by phone. REALTOR® C refused to accept the check indicating that he felt REALTOR® A’s actions were in violation of the Code of Ethics. REALTOR® C filed a complaint with the Association’s Grievance Committee alleging violation of Articles 2 and 3 on the part of REALTOR® A citing Standard of Practice 3-2 in support of the charge.

During the hearing, REALTOR® C stated that REALTOR® A’s modification of the compensation constituted a misrepresentation through concealment of pertinent facts since he had not provided REALTOR® C with specific written notification of the modification prior to the time REALTOR® C began his efforts to interest the purchaser in the listed property. REALTOR® A defended his actions by indicating that timely notice of the modification of compensation offered had been provided to REALTOR® C by telephone prior to REALTOR® C submitting a signed offer to purchase. REALTOR® A also indicated that his modified offer of compensation had been noticed to all Participants, including REALTOR® C, through the MLS in accordance with Standard of Practice 3-2 prior to the time that REALTOR® C had submitted the signed offer to purchase. REALTOR® A also commented that had REALTOR® C submitted the signed offer to purchase prior to REALTOR® A communicating the modified offer, then REALTOR® A would have willingly paid the amount originally offered.

Based on the evidence presented to it, the Hearing Panel concluded that REALTOR® A had acted in accordance with the obligation expressed in Standard of Practice 3-2 based on changing the offer of cooperative compensation in the MLS alone, even without the courtesy phone calls, and there had been no concealment of a pertinent fact relating to the transaction, and consequently was not in violation of Articles 2 or 3.
Leading By Example
Submit Your Positive Industry Related Story
for the Chance to Win a Gift Card to The Bartolotta Restaurants
Unfortunately, the general consensus from our members is that poor behavior in our market has been a significant problem. That is one of the reasons the GMAR created this ethics-focused newsletter. Through our new strategic plan, the GMAR and its Board of Directors are focused on improving the ethics and professional courtesies of our business.
At the GMAR, we hear many stories about poor agent behavior and we think it’s time we hear some positive stories about our members! Did you have a transaction where the co-broke or listing broker went the extra mile? Is there a REALTOR® that you enjoy working with because they know how to problem solve and make transactions go smoother? Would you like to share an inspirational story about a competitor? We can all learn from those who lead by example.
We will select and publish these inspirational stories through January 30, 2020. Following that time frame, the GMAR will select two winners, at-random, from all published entries. Both the REALTOR® who submitted the story and the GMAR Member (who is the subject of the story) will win a $100 gift card for The Bartolotta Restaurants compliments of Milwaukee HomeSight Inc.
Submit your entries to the GMAR:

We look forward to hearing your positive stories!
NAR Commitment to Excellence (C2EX) Program is Raising the Bar for REALTOR ® Professionalism
The National Association of REALTORS ® proudly introduces Commitment to Excellence, a cutting-edge program that empowers REALTORS ® to evaluate, enhance, and showcase the highest levels of professionalism. As members, you can get started today by logging into the page below and taking the self-assessment that measures your proficiency in each of the elements of professionalism, known as the C2EX Competencies. Based on your results, the platform will generate customized learning paths, recommend experiences, and provide tools and resources to increase your knowledge and enhance your skill-sets. We encourage you to check out the C2EX program, and pass it along to others in your office and our industry who would benefit from the assessment.
We hope you enjoyed Issue #20 of Ethics Exchange 2019 brought to you by the Greater Milwaukee Association of REALTORS ® (GMAR). The GMAR created this newsletter, each issue dedicated to a unique issue, because the REALTOR ® Code of Ethics, on which our industry is built, is the foundation of what it means to be a REALTOR ® .
Your proactive support of the Code of Ethics will assure your fellow REALTORS ® , as well as members of the public, that every member of GMAR operates under the highest ethical standards.
Questions, comments or concerns regarding this issue can be directed to
Scott Bush at the GMAR Office (414-778-4929 or