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Intentional Misrepresentation
of a Competitor's Business Practices
Following a round of golf early one morning, Homeowner A approached REALTOR® X. “We’ve outgrown our home and I want to list it with you,” said Homeowner A. “I’m sorry,” said REALTOR® X, “but I represent buyers exclusively.” “Then how about REALTOR® Z?,” asked Homeowner A, “I’ve heard good things about him.” “I don’t know if I would do that,” said REALTOR® X, “while he does represent sellers, he doesn’t cooperate with other brokers and, as a result, sellers don’t get strong offers for their properties.”

Later that day, Homeowner A repeated REALTOR® X’s remarks to his wife who happened to be a close friend of REALTOR® Z’s wife. Within hours, REALTOR® Z had been made aware of REALTOR® X’s remarks to Homeowner A earlier in the day. REALTOR® Z filed a complaint against REALTOR® X charging him with making false and misleading statements. REALTOR® Z’s complaint was considered by the Grievance Committee which determined that an ethics hearing should be held.

At the hearing REALTOR® Z stated, “I have no idea what REALTOR® X was thinking about when he made his comments to Homeowner A. I always cooperate with other REALTORS®.” REALTOR® X replied, “That’s not so. Last year you had a listing in the MLS and I spent months working with the buyers that submitted a purchase offer. You didn’t pay me the offer of compensation, though; you paid another broker who stole my clients from me at the last minute, and all he did was submit the purchase offer.”

REALTOR® Z countered REALTOR® X’s statements, indicating he had made a blanket offer of compensation in the MLS, and that his refusal to pay REALTOR® X had nothing to do with him not cooperating with other brokers, but the fact that there was a procuring cause dispute at the end of the transaction. Upon questioning by panel members, REALTOR® X admitted he had no personal knowledge of any instance in which REALTOR® Z had refused to cooperate with any other broker, but assumed that his failure to pay the compensation REALTOR® X felt he had earned was likely how REALTOR® Z treated other brokers.

The Hearing Panel, in its deliberations, noted that cooperation and compensation are not synonymous. In fact, Standard of Practice 3-10 provided that the duty to cooperate established in Article 3 relates to the obligation to share information on listed property, and to make property available to other brokers for showing to prospective purchasers/tenants when it is in the best interests of sellers/landlords. In that respect, the Hearing Panel felt REALTOR® Z had, in fact, cooperated with REALTOR® X. However, to characterize REALTOR® Z’s refusal to pay requested compensation because of a genuine commission dispute as a “refusal to cooperate”, and to make the assumption and subsequent statement that REALTOR® Z “did not cooperate with other brokers”, was false, misleading, and not based on factual information. Consequently, REALTOR® X was found in violation of Article 15.
Pathways to Professionalism
While the Code of Ethics and Standards of Practice of the National Association OF REALTORS® (NAR) establish objective, enforceable ethical standards governing the professional conduct of REALTORS®, it does not address issues of courtesy or etiquette. Based on input from many sources, the Professional Conduct Working Group of the Professional Standards Committee developed the following list of professional courtesies for use by REALTORS® on a voluntary basis. 

1) RESPECT FOR THE PUBLIC
  • Follow the “Golden Rule” – Do unto others as you would have them do unto you.
  • Respond promptly to inquiries and requests for information.
  • Schedule appointments and showings as far in advance as possible.
  • Call if you are delayed or must cancel an appointment or showing.
  • If a prospective buyer decides not to view an occupied home, promptly explain the situation to the listing broker or the occupant.
  • Communicate with all parties in a timely fashion.
  • When entering a property, ensure that unexpected situations, such as pets, are handled appropriately.
  • Leave your business card if not prohibited by local rules. Do not leave behind business cards that contain advertisement.
  • Never criticize property in the presence of the occupant.
  • Inform occupants that you are leaving after showings.
  • When showing an occupied home, always ring the doorbell or knock – and announce yourself loudly – before entering. Knock and announce yourself loudly before entering any closed room.
  • Present a professional appearance at all times; dress appropriately and drive a clean car.
  • If occupants are home during showings, ask their permission before using the telephone or bathroom.
  • Encourage the clients of other brokers to direct questions to their agent or representative.
  • Communicate clearly; don’t use jargon or slang that may not be readily understood.
  • Be aware of and respect cultural differences.
  • Show courtesy and respect to everyone.
  • Be aware of – and meet – all deadlines.
  • Promise only what you can deliver – and keep your promises.
  • Identify your REALTOR® and your professional status in contacts with the public.
  • Do not tell people what you think – tell them what you know.

2) RESPECT FOR PROPERTY
  • Be responsible for everyone you allow to enter listed property.
  • Never allow buyers to enter listed property unaccompanied. Never give out a lock box combination.
  • When showing property, keep all members of the group together.
  • Never allow unaccompanied access to property without permission.
  • Enter property only with permission even if you have a lockbox key or combination. Alert the listing agent immediately if the lock box does not open or malfunctions.
  • When the occupant is absent, leave the property as you found it (lights, heating, cooling, drapes, etc). If you think something is amiss (e.g. vandalism) contact the listing broker immediately. 
  • Be considerate of the seller’s property. Do not allow anyone to eat, drink, smoke, dispose of trash, use bathing or sleeping facilities, or bring pets. Leave the house as you found it unless instructed otherwise.
  • Use sidewalks; if weather is bad, take off shoes and boots inside property. Consider the use of shoe covers in inclement weather.
  • Politely remind parents to keep track of their children’s activities as children can wander unoccupied, or handle the sellers’ personal property.          
                   
3) RESPECT FOR PEERS
  • Identify your REALTOR® and professional status in all contacts with other REALTORS®.
  • Respond to other agents’ calls, faxes, and e-mails promptly and courteously.
  • Be aware that large electronic files with attachments or lengthy faxes may be a burden on recipients.
  • Notify the listing broker if there appears to be inaccurate information on the listing.
  • Share important information about a property, including the presence of pets; security systems; and whether sellers will be present during the showing.
  • Show courtesy, trust and respect to other real estate professionals.
  • Avoid the inappropriate use of endearments or other denigrating language.
  • Do not prospect at other REALTORS®’ open houses or similar events.
  • Return keys promptly.
  • Promptly provide showing reports to the listing agent.
  • Carefully replace keys in the lockbox after showings.
  • To be successful in the business, mutual respect is essential.
  • Real estate is a reputation business. What you do today may affect your reputation – and business – for years to come.
We hope you enjoyed Issue #9 of Ethics Exchange 2020 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 scott@gmar.ws).