High List Prices are Misleading

Angry salespeople should complain to local association

February 1, 2001

Q. When a homeseller in our community interviews several listing agents, one practitioner here will “buy” the listing by inflating the list price well above any reputable CMA. Once she successfully “buys” the listing, she holds a brokers’ open house, then asks all the attending salespeople to provide a written list price for the property.

The salespeople’s prices are more realistic and much lower than her price. Her usual tactic then is to tell the seller those nasty colleagues of hers said the house was overpriced and they need to reduce it or the property likely won’t be shown.

She has a loyal following of seniors who, despite being persuaded to list at an unrealistically high price, don’t understand what’s going on and don’t realize they’re not being well or ethically served.

Please advise how we should deal with this situation.

A.You’re right. This tactic does nothing to enhance the professionalism or quality of real estate services to the public.

When we act in an agency capacity, sellers (and buyers, too) rely on us to protect and promote their interests. That’s the basis of Article 1 of our Code of Ethics. Moreover, Standard of Practice 1-3 of the Code prohibits us from “deliberately misleading the owner as to market value” when trying to secure a listing.

It seems this person is doing just what the Code prohibits.

Your best bet is to file a Code of Ethics complaint against the practitioner and let the system work for you.

Q. Another salesperson previewed my listing and told the owner’s daughter the property would sell fast because it’s underpriced. The daughter told the owner, and, as a result, the owner refused to sign a previously agreed-to counter on an offer and asked me to raise the listing price.

The property is still for sale after more than a month and a half at the new listed price. Is the action or statement of the other salesperson unethical?

A. In general, REALTORS® shouldn’t “deal” with the client of another REALTOR®.

From your letter, it’s difficult to tell whether there were any “dealings” going on or whether conversation was initiated by the owner (or the owner’s daughter).

Standard of Practice 16-13 of the Code of Ethics provides that dealings with another REALTOR®’s client are acceptable if the client initiated the dealings. The other agent may have been trying to be “positive” or “helpful” to the owner.

This is a good example of how seemingly helpful comments can gum up the works. Assuming the property was appropriately priced, after the owner confronted you with the statement from the other salesperson, you might have been able to bring out your CMA and remind the owner of your pricing discussions when you listed the property.

You also might have talked about other showings and the feedback you received from other salespeople about the property and pricing.

At a minimum, as a matter of courtesy, the other salesperson shouldn’t have offered or volunteered an opinion about the list price.

If the practitioner went beyond that and had “dealings” with your client, there may be basis for an ethics complaint.

Bruce Aydt
columnist

Attorney Bruce Aydt, ABR, CRB, SRS, is a national real estate educator, a Missouri real estate broker, and past chair of the NAR Professional Standards Committee.

You can send him your ethics questions at ethics@realtors.org.

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