Shhhh…Did you Hear that Bell?
Here’s the scenario: You represented a seller as their agent through the terms of an Exclusive Right to Sell contract. The contract expired and the seller opted to list with another brokerage. You’re now working with a buyer client in a buyer agency relationship and they want to view this property. During the course of your relationship with the seller, you were told that they inherited the house so any sale would be ‘all gravy’ to them. Yes, they’d like to get fair market value for the listing but they’d also take a low-ball offer to ‘unload’ the property fast.
Can you tell your buyer client this fact? Well…as we’ve heard agency explained before…you can’t unring that bell, so no. Here’s a question that appeared on a quiz the office put out several years ago:
Q: My agency relationships end….
A. When the deal closes
B. If the buyer or seller ‘fires’ me [although this never happens]
C. When the listing agreement or buyer agreement expires
D. Agency relationships don’t end.
E. A and C
F. A, B and C
And the answer is F
Agency relationships end when you are no longer authorized to represent your client. This occurs when the transaction closes, if the client terminates their relationship with you or when your agreement for representation expires.
Representation should not be confused with confidentiality. Your duty to maintain confidential information does not end, expire or terminate but your representation of a party does. Think of it as doing a job for Don Corleone, even when you’re out…
For reference, the Code of Ethics – Article 1, Standard of Practice 1-9 states:
The obligation of Realtors® to preserve confidential information (as defined by state law) provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any non-agency relationships recognized by law.
Realtors® shall not knowingly, during or following the termination of professional relationships with their clients:
- reveal confidential information of clients; or
- use confidential information of clients to the disadvantage of clients; or
- use confidential information of clients for the Realtor®’s advantage or the advantage of third parties unless:
- clients consent after full disclosure; or
- Realtors® are required by court order; or
- it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or
- it is necessary to defend a Realtor® or the Realtor®’s employees or associates against an accusation of wrongful conduct.
Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended 1/01)
Under Agreement, Pending…What’s with that Listing?
There have been queries, there have been frustrations and there have been complaints and fellow REALTORS® working with their buyers are starting to feel foolish. Those active properties that they’ve sent to their buyers are really pending ‘and have been for a while’. So, let’s go over the rules about under agreement and pending:
Within 2-business days of a signed purchase and sale contract, the Multiple Listing Service must be updated to reflect a change in the property status. Leaving the property unchanged as active is not an option. You do, however; have two options, and which you choose is based on what the seller is willing to do.
Do they want to continue displaying their listing on the web and do they wish to show the property, and take back up offers? YES? Then, active with a contingency is the status for you. This allows listings to be marketed on websites such as realtor.com, Trulia, Zillow and IDX sites and apprises fellow REALTORS® that you’ll set up showings and take back up offers. If you are not setting up showings when you receive inquiries, then you need to move along to pending. Pending is used when the purchase and sale has been firmed up and closing is imminent or when the seller will no longer show the property. Pending removes the property from all web advertising.
Please remember, the Code of Ethics says that you shall work in the best interest of the seller. However, the seller cannot direct you to violate the rules and regulations of the MLS. Additionally, the Code of Ethics specifies under Article 12 that REALTORS®shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing and other representations…
The MLS Board of Directors reviewed and confirmed the current MLS Rules and Regulations and Submission Policies relative to status changes, including but not limited to:
MLS Rules & Regulations – Section 1 Listing Submission: Section 1.6 Contingencies Applicable To Listings: Any contingency or conditions of any term in a listing shall be recorded on the Property Data form, to be noticed to the Participants.
MLS Submission Policies – Modifications to Listing Submission: All listing modifications must be submitted to the MLS Service within two (2) business days.
The Board revised the fine structure, to the brokerage, associated with a failure to report a status change to mirror a failure to submit the listing into the MLS:
- First Offense, Warning
- Second Offense, $50 fine
- Third Offense, $200 fine
- Fourth Offense, $400 fine
- Beyond Fourth Offense, filing with the MLS Board of Directors for administrative review
We’re interested in helping you through the process of adding / removing contingencies or determining what your next, correct step is so please don’t hesitate to contact the staff for assistance.