Buying or Selling a Home/Obligation

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Expert: - 3/25/2010


Question
My buyer learned of a property for sale through family and I showed it to her. Then the listing expired and she now wants me to write an offer. The Seller, whom she is distantly related to, knew she was going to put in an offer and let the contract expire. So the Seller may still be liable for commission due to the listing agent. The only thing that ends the contractual obligation of the seller to the listing agent is once the set number of days expire or the seller has a new brokerage list the property. I would assume it is unethical at this point for me to list the property and process the sale, so should the seller go back to the agent, re-list and then I let my buyer make the offer?

Answer
Hello Jill - The question you are asking is a moral question. For this to be unethical it would have to violate an Article of the NAR Code of Ethics. There is not Article or Standard of Practice that relates to this situation. Therefore, this is not an ethical question or one of a contract law violation as posed. Clarifying, I am anticipating you are speaking of the AZ AAR Exclusive Right to Sell/Rent. The language in this document does indicate that to which you are referring. Moral questions are difficult to answer if you one is not familiar with the code of ethics, laws, rules, etc. The NAR Code of Ethics Preamble does challenge us to conduct our activities "Beyond that of ordinary commerce" where ordinary commerce might be described as according to law. So, lets look at this from a different perspective. According to the terms of this listing contract there is nothing that prevents you from listing the property, and there is no Article of the NAR Code of Ethics establishing a standard of practice aspiring you not to list the property, there is only one question remaining: Once a listing expires, may any licensee list the property? Yes. Are you a licensee? Yes. Procuring cause issue? No! since the contract establishes that there is no compensation due if it is relisted with another firm. Therefore, this is clearly nothing more than a moral dilemma. You should provide your buyer the opportunity to first contemplate consent to dual agency with informed consent. If the buyer is willing to consent to dual the next situation is to discuss the possibility of listing this home with the seller. If the seller asks you to list the property you can... of course, you should make the seller aware that you have a buyer for the home and that would mean that prior to entering into discussion to list the home you would be required to receive from the seller informed consent to dual representation. The seller should then sign the AAR Consent to Limited Representation. Once the seller has agreed and signed the document you have complied with your duty to provide PRIOR informed consent before representing both parties to a contract (Statute and NAR COE). Of course, there will be other licensees who interpret this as possibly not doing the right thing. The moral dilemma is what is the right thing? if you are not violating law, administrative code, mls rules and regulations, or the code of ethics... what is morally wrong? In closing this reply, I always recommend discussing situations like this with your broker prior to entering into any agreement you believe may be controversial and end in a complaint. Dot your "i"'s and cross your "t"'s. - 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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