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.
Client's Choice Trumps Prior Relationship
When buyers switch agents without solicitation, there's no Code violation.
July 1, 2008
Q. An associate from another brokerage showed one of our listings and, on behalf of a buyer, presented an offer considerably under the asking price. The offer was rejected, and the buyer’s rep never submitted a second offer. A full month later, the same buyer came into our office and told us he wanted to work with “the listing office, not the other office.” No one in our office had had any prior contact with him except reviewing the offer submitted by the other associate. The listing agent showed the buyer the house again and wrote a new offer more in line with the list price. That offer was accepted and closed. The other associate says I should have notified his broker about the contact, offer, and subsequent closing and that I violated the Code of Ethics. This buyer made it quite clear that he would not work with the other office. Did we violate the Code of Ethics?
A. Based on what you’ve described, it doesn’t look like you violated the Code. Standard of Practice 16-13 covers situations like this. It provides that “all dealings . . . with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client . . . except where such dealings are initiated by the client.”
It goes on to say “REALTORS® shall not knowingly provide substantive services concerning a prospective transaction to prospects who are parties to exclusive representation agreements, except with the consent of the prospects’ exclusive representatives or at the direction of prospects.”
If the buyer was not exclusively represented by the other REALTOR®, Standard of Practice 16-13 does not apply and you had no obligations to the other salesperson. Even if the buyer was exclusively represented by the other REALTOR®, you did not violate the Code since the buyer initiated the dealings with you by coming to your office without any solicitation on your part. Because the buyer very clearly stated that he did not want to work with the other company, there is no violation of the Code or Standard of Practice 16-13.
However, it is still possible that the other REALTOR® may make a claim in arbitration for the cooperative commission since he did substantial work with this buyer on this home and wrote an earlier offer. An arbitration claim would be governed by the Arbitration Guidelines in the Code of Ethics and Arbitration Manual.