Buying or Selling a Home/Calling the listing agent

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Expert: - 2/17/2010


Question
I am a prospective first-time homebuyer.  I have been working with an agent (Jim) and have seen about 10 homes, none of which I wanted.  I saw a home listed on the internet and asked the realtor if he could show it to me.  He said he could, but he was not able to do so immediately and I would have to wait a couple of days.  The listing price and neighborhood looked very good, so I was impatient and called the listing agent.  The listing agent had his partner walk me through the home, under a verbal agreement that his partner (Ken) would be my agent if I bought the home.  

My question is, would it be unethical for me to buy a home using Ken as my agent if I have been looking at homes with Jim?  I am concerned because Jim did try to find a home for me and spent time with me, but of course if I buy a home using Ken, Jim will end up with no commission to show for his work.  

I would appreciate your comments on the ethics of the situation.

thanks,
John.

(names have been changed to protect identities)

Answer
Hello "John" - For a situation to be unethical it would need to violate one of the National Association of REALTORS Code of Ethics. If you have not signed a representation agreement #buyer broker agreement# then you are not obligated to use only one agent to help you find your home. There is another term called 'procuring cause' which is the process that is followed when determining which agent #working with buyer# has earned the compensation. There are two conditions called estrangement and abandonment which assist in identifying the role each agent played in the buyers decision to contact the second agent. Another approach is the moral dilemma... only you can determine your feelings on which deserves your business based on your personal definitions of right and wrong, good and bad, what you see others get away with and not, and your understanding of the ordinary commerce. The other issues are based on the types of representation you would receive from Jim v. Ken and what representation becomes limited based on the fact that Ken works for the listing broker therefore the broker would represent both the seller and you in a type of limited representation. Each state has different definitions of agency relationships therefore verify the definitions in your state but realize that you may lose some representation services when using the same broker which also represents the seller. The types of agency to define are: single agency, limited dual agency, dual agency, sub-agency, and facilitator. Based on the situation you described and the information provided there is no ethical violation in allowing Ken to represent you although there may be significant differences in the level of representation you receive. In Kens case, there may be an ethical violation of the Article One of the Code of Ethics should he offer to represent you without first obtaining your 'informed consent'. This is usually done by a state provided form which discloses the differences between the types of representation and then asks you to sign that you agree to enter into this type of representation with Ken. This information should provide you with the proper objective information to decide whether to work with Jim or Ken. Please reply to this post should you desire additional information. I have additional posts on this site that will provide you with a thorough understanding of procuring cause. - Todd Menard

Buying or Selling a Home

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Todd C. Menard

Expertise

National Association of Realtors Code of Ethics and Professional Standards * Contract Questions: 05/05 Arizona Real Estate Purchase Contract, Exclusive Buyer Broker Contracts, Listing Contracts and associated contract documentation as it relates to boilerplate, covenants, contingencies, procedures and procedures. * ARMLS Arizona Regional Multiple Listing questions * Real Estate Professional Standards and Practices, Ethics, Obligations, Duties * Agency relationships in Arizona, Procurring Cause * Questions typicaly arising during the listing period * Questions typically arising during the escrow period * Questions about working with a real estate agent/REALTOR * Questions Related to New Home Builders

Experience

National Association of REALTORS Board of Director (2011) Arizona Real Estate Salesperson License (1991-1995), Arizona Real Estate Brokers License (1995-Present), Arizona Association of REALTORS Board of Directors (2008-Present), Arizona Association of REALTORS Professional Standards Committee (2008-Present), AAR Certified NAR Code of Ethics and Professional Standards Instructor, Southeast Valley Regional Association of REALTORS President-Elect (2011) Southeast Valley Regional Association of REALTORS Board of Directors (2008, 2009), Southeast Valley Regional Association of REALTORS Grievance Committee Chairperson (1998-2007), Southeast Valley Regional Association of REALTORS Bylaws Committee (2008-Present), Southeast Valley Regional Association of REALTORS Education Committee (2008), Arizona Association of REALTORS Forms Committee - Residential Purchase Contract (2005), Arizona Association of REALTORS Forms Committee - Residential Rental Agreement (2008), Arizona Association of REALTORS Forms Committee - Buyer Broker Agreement (2009), Arizona Association of REALTORS Presidents Advisory Group, Road to Professionalism (2009), Arizona Association of REALTORS GRI Curriculum Review Committee (2009), Arizona Department of Real Estate, Commissioner's Education Advisory Group Sub-Panel B (2010) Arizona Department of Real Estate, Commissioner's Statute and License Review Committee (2007)

Organizations
National Association of REALTORS, Arizona Association of REALTORS, Arizona Real Estate Educators Association (AZREEA), Arizona Regional Multiple Listing System (ARMLS), American Notary Association, Southeast Valley Regional Association of REALTORS (SEVRAR), Southeast Valley Regional Association of REALTORS Women's Council of REALTORS (2010-Present), Phoenix Association of REALTORS (1994-2000, 2005-2009), Scottsdale Association of REALTORS (1994-2000, 2005-2009), Maricopa/Glendale Association of REALTORS (1994-2000, 2005-2009),

Publications
"Real Estate in 2008"- Lifebushido Publishing (Contributory Author), SEVRAR Magazine, Internet Crusade, RealTown ListServe, Blogger.com, Active Rain

Education/Credentials
- AAR Certified Ethics and Professional Standards Instructor, Graduate REALTOR Institute (1993), Certified Negotiation Expert (CNE), Over 100 Hours of annual real estate continuing education, Annual Ethics and Professional Standards Development Workshops as required by the National Association of REALTORS, Approx. 36 hours of NAR Code of Ethics training annually, Numerous IDW, Seminars and Train the Trainer programs, Business Management Degree - 1981

Awards and Honors
2009 REALTOR of the Year Award, Southeast Valley Regional Association of REALTORS (10,000+ Members), Double Platinum Production Award ($45,000,000 Sales Volume)- Keller Williams Realty Int'l (2001), Top 15 Sales Production Keller Williams Realty International (2001), Top 5 Sales Producation Keller Williams Realty Southwest Region (2001), Top Recruiter Award - Keller Williams Realty Int'l, SW Region (2002), Who's Who in U.S. Executive (1983), Who's Who in U.S. Real Estate Professionals (2007)

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