Get it in writing

Without a contract, you may not get paid.

February 1, 2006

Q: I spent about 50 hours over a two- to three-week period showing a buyer all the available homes for sale within her price range. When the buyer was ready to submit an offer, she told me she had to talk it over with her boyfriend and would get back to me. That same day, another real estate salesperson, who was a friend of the buyer but who hadn’t been involved in the transaction before, presented an offer on behalf of that buyer. The offer, for one of the homes I’d shown that buyer, effectively cut me out of the transaction. I didn’t have a contract with the buyer, but isn’t it unethical for the other salesperson to take credit for all the work I’d done?

A: Article 16 of the Code of Ethics protects exclusive agreements between brokers and clients by providing that: “REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.” Because you didn’t have an exclusive buyer representation agreement with the buyer, she had no obligation to work with you, and the other salesperson didn’t violate Article 16.

Although there may not have been an ethics violation, you may have a claim to any cooperative commission offered by the listing broker. If the listing was in your MLS and offered cooperative compensation and the other salesperson is also a REALTOR®, you can request mediation or file an arbitration claim through your association of REALTORS®. The arbitration guidelines in the Code of Ethics and Arbitration Manual explain the factors hearing panels use to determine entitlement to cooperative compensation in disputes.

I noticed a mistake in the counteroffer, but I didn’t say anything. Now what?

Q: I presented an offer to a listing agent on behalf of my buyer clients. The offer called for the sellers to pay closing costs. Several hours later the listing agent called to say she was bringing a counteroffer. She described some of the counter provisions, including the fact that the sellers weren’t willing to pay closing costs. When I picked up the written counteroffer, however, I noticed that it still showed closing costs being paid by the sellers. I presented the counteroffer to my buyer clients, and they accepted.

The next day, the listing agent called me and said she’d made a mistake. The sellers had no intention of paying the closing costs. Should I have contacted the listing agent before presenting the counteroffer to my client since I realized that leaving in the provision was probably a mistake? Isn’t my obligation first and foremost to my client?

A: Your situation involves concepts from both Article 1 and Article 9 of the Code of Ethics. Article 1 provides that “When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly.”

Because you had been told that the sellers weren’t willing to pay the closing costs even though the written counteroffer failed to include that change, I believe, based on Article 1, you should have contacted the listing agent to clarify the disparity.

Article 9 requires that “REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions . . . are in writing in clear and understandable language expressing the specific terms, conditions, obligations, and commitments of the parties.” You knew there was a difference between the written document and how the listing agent had described specific terms of the counteroffer. Yet the sale contract you received didn’t express the “specific terms” intended by the sellers as you understood them. A call to the other agent might have resolved the discrepancy.

Bruce Aydt

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