If you are receiving this handout electronically, you may either view it on an electronic device or print out one copy for your use only. You may ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
If you are receiving this handout electronically, you may
either view it on an electronic device or print out one
copy for your use only.
You may not reproduce or redistribute any portion of this
packet without the express written permission from the
GAR Professional Development Department.
Georgia REALTORS® partners with the Local Boards and
REALTOR® Firms to provide quality, affordable continuing education courses.
Lions, Tigers, Ethics…Oh My!
#68300
Sponsored by:
Georgia Association of REALTORS®, GREC School #271
Visit the Georgia REALTORS® website to learn about
membership benefits, continuing education opportunities,
networking events, and more!
(garealtor.com)
NOTICE: The following material is copyrighted and is provided to you for one-time use only in this GAR-sponsored course.
You may not reproduce or redistribute any portion of this packet
without the express written permission from the GAR Professional Development Department.
2020
STUDENT NOTICE
The Georgia Association of REALTORS®, Inc. is approved by the Georgia Real Estate
Commission (GREC) to offer continuing education, sales postlicense, and broker prelicense
courses. The GREC school code number is 271 with a renewal date of December 31, 2023.
The Georgia Real Estate Commission has approved this course for three (3) hours of
continuing education credit and three (3) hours instructor education credit. GAR school
policy defines an instructional hour as 50 minutes.
To receive continuing education (CE) credit for this in-classroom course, the student must:
✓ be on time
✓ sign in with the course facilitator before the course begins
✓ be present in the course during all instruction periods
✓ return a completed evaluation to facilitator at the end of course if an in-classroom format,
or complete the online evaluation if a Livestream (virtual) class format – link will be
emailed to you within a business day after the course.
✓ not have taken this course for continuing education credit within the past 366 days.
There is no make-up session for this course.
Cell phones and other electronic devices can be distracting. Use of communication methods
such as text messaging, E-mailing, web surfing, etc. is prohibited while class is in session if
it poses a distraction to other attendees and shall be grounds for dismissal. Taking pictures
of PowerPoint slides requires the permission of the instructor.
Entrance qualifications and standards of completion will not be based on race, color, sex,
religion, national origin, familial status, handicap, sexual orientation, or gender identity.
No recruiting for employment opportunities for any real estate brokerage firm is allowed
during this course or on the premises while this course is in session. Any effort to recruit by
anyone should be promptly reported to the Director of Professional Development; Georgia
Association of REALTORS®; 770-451-1831; 6065 Barfield Road; Sandy Springs, GA 30328;
or to the Georgia Real Estate Commission; 404-656-3916; International Tower; 229
Peachtree Street, NW; Suite 1000; Atlanta, GA 30303-1605.
6-2020
Lions, Tigers, Ethics…
Oh My!
NAR Code of Ethics
Meets the requirement for 2019-2021 Cycle
Joi Bostic
Instructor
History of NAR and Code of Ethics Structure of NAR Code of Ethics – Review Three Sections Seventeen Articles Standards of Practice Joi Bostic Lions, Tigers, Ethics…Oh My! 2|P a ge
What Should We Do…
Duties to Clients and Customers
Article 1 – Material Facts
As the exclusive agent of Steven, Realtor® Aleena offered Steven’s house for sale,
advertising it as being located near a bus stop. Martin, a prospective buyer, who
explained that his daily schedule made it necessary for him to have a house near the
bus stop, was shown Steven's property, liked it, and made an offer and earnest money
deposit. Two days later, Aleena read a notice that the bus line running near Steven’s
house was being discontinued.
1. What should Aleena do with this information?
2. Does Steven have any obligation concerning this information?
3. Once informed, does Martin have any obligations?
4. What should happen to the earnest money?
Article 3 – Negotiating Commission
The small commercial building is reasonably priced, in good condition, and located on
a high-traffic street in a quaint neighborhood of Chicago, so it is no surprise that two
offers are made only after a few days on market. John, the listing broker, presents
both offers to the seller, Kathy. One of the offers is from a client of John’s and the
other is an offer from Buyer Broker Bob’s client.
“These offers are both full price, with no contingencies, and there seems to be no
difference between them,” says Kathy to John. “Can we make a counter-offer for
more money?”, she asks. John explains that countering a full-price offer could result
in one or both buyers walking away from the table.
"Okay, I'll tell you what," says Kathy, "If you reduce your commission, I'll accept the
offer you procured. Although you will earn a little less than we agreed in the listing
Joi Bostic Lions, Tigers, Ethics…Oh My! 3|P a gecontract, you'll still get more than you would if you had to pay the other buyer's
broker." John agrees.
Buyer Broker Bob learns from his client, who contacted seller Kathy directly to find
out why her full-price offer wasn’t accepted, that listing broker John had reduced his
commission to make the offer that he procured more desirable. Bob is very upset.
1. Can John renegotiate his listing commission at the time he presents the two
offers?
2. By reducing the listing commission, can John present both offers in an
objective manner, as required by Standard of Practice 1-6?
3. Under Article 3, as established in Standard of Practice 3-4, is John obligated
to inform Bob that he modified the listing commission prior to the offer
being accepted?
Article 2: Protecting Owner’s Interest - Video
Article 1 – Legal Listing?
Edward contacted Realtor® Jack to list a small commercial property, explaining that
he desired at least $170,000 from its sale. Edward and Jack discussed the commission
and other selling costs. Jack concluded with, “Don’t worry. I feel confident that I
can get your property sold for more than $170,000. So all of the costs will come from
the proceeds above $170,000.” Edward felt assured and signed the listing.
Later the property was sold to Buyer Kimberly for $220,000. At the closing, Edward
realized that Jack’s firm would receive nearly $50,000 in commission.
1. Is this legal in Georgia?
2. What would have been the proper action to take?
3. Is this allowed according to the Code of Ethics?
Joi Bostic Lions, Tigers, Ethics…Oh My! 4|P a geArticle 1: Knowledge of Proposed Legislation
Realtor® Richard, received a letter from Allstar College located in Iowa, stating that
one of its graduates in Richard’s city had willed a vacant property in that community
to the college. The letter explained that the college had no use for the property, and
wanted Richard to list and sell it at its fair market value. The proceeds would go to
the endowment fund of the college. Richard suggested a price for the property, an
exclusive listing contract was signed, and in less than a month the lot was sold and
settlement made with the college. Two weeks later, a trustee of the college, who
handled its investments, learned of proposed local legislation which had resulted in
sale of the property at approximately one-eighth of its fair market value.
(1) The client’s property was in an area which had been approved for rezoning from
residential to commercial use in a general revision of the local zoning map and
ordinance that was in preparation. (2) Although specific sections of the revisions,
including the section involving the lot in question, had been tentatively approved,
final approval had not been given to the complete revision at the time of the sale, but
this action had been taken a few days following the sale. For several months prior to
the sale there had been a public notice of the proposal to rezone affixed to a sign
near one corner of the property. (3) In his one inspection of the property, Richard had
not noticed the sign. (4) Other sales in the rezoned area substantiated the client’s
belief that the shift to commercial zoning supported a value at approximately eight
times the price received for the lot.
1. Did Richard have an obligation to investigate any possible actions that would
affect the property?
2. Since the rezoning had not gone in effect at the time of the listing or sale,
did Richard have any obligation concerning such?
3. Did Richard violate the Code of Ethics?
4. Did Richard violate Georgia License Law?
Article 3: Listing or Love Shack - Video
Joi Bostic Lions, Tigers, Ethics…Oh My! 5|P a geArticle 2: Obligation to Ascertain Pertinent Facts
Cindy was the listing broker of a house located on Park Green Lane. Buyer Sarah
expressed interest in the house and Cindy showed it to her multiple times in addition
to having several conversations about the property. Since public sewer was available
on the street and that the majority of the houses on the street for several blocks
were connected to public sewer, Sarah assumed that the subject property was
connected as well. Cindy and Sarah never had a direct conversation about the system
and Cindy did not include any reference to the house being connected in any of her
advertisements.
Sarah never asked Cindy directly whether the house was connected to public sewer or
on a septic system. Cindy never disclosed this fact to Sarah nor investigated whether
the house was or was not connected. Instead she relied on that the seller had said
the property was connected.
Shortly after closing, Sarah discovered that the house was in fact on a septic system
and filed a complaint against Cindy alleging that Cindy failed to disclose a substantial
fact concerning the property.
1. What was Cindy’s obligation concerning the disclosure of the property’s
connection?
2. Did Cindy violate the Code of Ethics?
3. Did Sarah have any responsibility in discovering whether the property was or
was not connected?
Article 1 – The Offer of a Bonus
Realtor® Vincent was a sales associate with Get It Closed Brokerage. To promote Get
It Closed’s in-house listings, the firm offered $1,000 bonuses to the company’s sales
associates at time of closing on each of Get It Closed’s listings they sold.
Dr. Johnson, a recent transferee to the town, entered into a buyer representation
agreement with Get It Closed through Vincent. Dr. Johnson explained he had specific
needs, foremost of which was any home he purchased be convenient for and readily
accessible by Dr. Johnson’s spouse who was physically challenged. “Part of my wife’s
physical conditioning program is swimming,” said Dr. Johnson, “so in addition to
everything else, I am looking for a home with a pool or room to build a pool.”
Vincent knew there were a number of homes for sale meeting most of Dr. Johnson’s
general specifications, several of which were listed with Get It Closed.
Over the next few days, Vincent showed Dr. Johnson several properties in the
Blackacre subdivision, all of which were listed with Get It Closed, including one with
an outdoor swimming pool. Not included among the properties shown to Dr. Johnson
Joi Bostic Lions, Tigers, Ethics…Oh My! 6|P a gewere several similar properties in Blackacre listed with other firms, including one with
an indoor pool.
After considering the properties shown to him by Vincent, Dr. Johnson made an offer
on the home with the outdoor pool. His offer was accepted and the transaction closed
shortly thereafter.
1. Had Vincent acted in Dr. Johnson’s best interest?
2. Did Vincent violate the Code of Ethics?
3. Did Vincent violate Georgia law?
Article 1: Making Promises - Video
Article 1: Promotion to Client’s Interest
Zachary gave an exclusive listing on a house to Maxwell, stating that he thought
$132,500 would be a fair price for the property. Maxwell agreed and the house was
listed at that price in a 90-day listing contract. Maxwell advertised the house without
response over a few weeks, showing it to a few prospective buyers who lost interest
when they learned the price. In a sales meeting in his office, Maxwell discussed the
property, advised the other agents that it appeared to be overpriced, and that
advertising and showing of the property had proved to be a waste of time and money.
And it would be a waste of their time as well. As a result, the other agents would tell
prospective buyers inquiring about the house that it was overpriced.
1. What should Maxwell have done, if anything, differently?
2. What obligation does Zachary have in this situation?
3. Should Maxwell have taken any additional actions concerning this property?
4. What obligations do the other agents in Maxwell’s office have?
Joi Bostic Lions, Tigers, Ethics…Oh My! 7|P a geArticle 1: Presentation of Subsequent Offer After an Offer to Purchase Has Been
Acceptance by the Seller
Cynthia, a seller, contacted REALTOR® India, a listing broker, to list her property.
During the listing appointment, India and Cynthia signed a listing agreement that
included the following provision: “Seller agrees that Broker’s responsibility to present
offers to purchase to Seller for consideration terminates with Seller’s acceptance of
an offer.”
India presented an offer to purchase to her client, Cynthia, which was $20,000 less
than the property’s listed price. The property had been on the market for several
months and had not generated much interest. In her presentation, India told Cynthia
that, in her opinion, the offer was a good one and Cynthia should consider accepting
it. “With interest rates on their way up again,” said India, “properties are just not
moving the way they did six months ago.” Cynthia decided to accept the offer and the
transaction closed. Several months after the sale, Cynthia learned that a second offer
had been made on the property after she had accepted the first offer but prior to
closing. This second offer had not been submitted to her by India and was for $2,500
more than the first offer.
1. Were India’s actions appropriate?
2. Did Cynthia have a real claim against India?
3. Had India fulfilled her obligations to her client, Cynthia?
Duties to the Public
Article 11 – Scope of Expertise
It was a listing that Leo, a REALTOR®, now wished he had never taken. Keith, Leo’s
close friend, was selling his home and was adamant about having Leo list the
property. Leo appreciated the gesture, but repeatedly told Keith that his experience
was in commercial properties and not residential. In addition, Keith’s home was in an
area of the city that Leo didn’t know much about. Leo strongly urged Keith to have
the house appraised. Keith insisted he knew the area and that $166,000 was the
home’s fair market value. This amount seemed low to Leo, but he listed the house at
this price. It quickly sold to a young couple, Linda and Brian.
Five months later Leo received a call from Keith, who was upset. Keith told Leo that
he met the buyers, Linda and Brian, at a party and found out the two were moving
because Linda had been reassigned to another city by her company. The couple had
received an offer on the house for $190,000, which they declined, feeling they could
Joi Bostic Lions, Tigers, Ethics…Oh My! 8|P a gedo better. Keith was upset at Leo for not giving him better advice concerning the
$166,000 sale price.
1. In addition to Article 11, which other Article might apply to this case?
2. Is Leo in violation of the Code?
Article 13: Ignorance is No Excuse - Video
Article 11 – Contemplated Interest
Sean considers refinancing a twenty three unit apartment building he has owned for
several years to unlock some of the equity. The lending firm, ABC Mortgage, orders
an appraisal for the property from REALTOR® Paul, who happens to be a licensed
appraiser and a commercial real estate broker. The appraisal report is complete with
the property address, date prepared, value, purpose, and market data. After
receiving the appraisal, Sean is surprised to learn how much the building has
appreciated and decides to sell the property instead of refinancing it.
Because Sean likes how thorough REALTOR® Paul was with the appraisal process and
knowing that he is a commercial broker, Sean hires Paul to represent him as his listing
broker. Within one week, an offer is made on the property and accepted.
During the loan application, the prospective purchaser informs the new lender that
the property was recently appraised for ABC Mortgage. The lender is surprised to
learn that Paul is both the listing broker and the appraiser, and that no disclosure was
made about his “contemplated interest” as established in Standard of Practice 11-1.
1. As used in Standard of Practice 11-1, does Paul have a “present or
contemplated interest” in the property when he does the appraisal?
2. Is Paul in Violation of Article 11?
Duties to Others REALTORS®
Joi Bostic Lions, Tigers, Ethics…Oh My! 9|P a geArticle 15: Refusal to Provide Information - Video Article 15: Alleged Information - Video Article 16: Not Sharing Info - Video Joi Bostic Lions, Tigers, Ethics…Oh My! 10 | P a g e
Article 2 – Broker’s Responsibilities Qualifying broker Paul, also a Realtor®, was asked to list a neglected house that obviously needed a wide range of repairs. He strongly advised the owner that it would be to his advantage to put the house in good repair before offering it for sale, but the owner wanted it sold at once on an “as is” basis. Paul wrote a novel advertisement offering a “clunker” in poor condition as a challenge to an ambitious do-it-yourself hobbyist. A few days later, Sales Associate Carol, who was not a Board member, from Paul’s office showed the house to a retired couple who liked the location and general features, and who had been attracted by the ad because the husband was looking forward to applying his “fix- up” hobby to improving a home. The sale was made. Shortly thereafter, Paul was charged by the buyer with having misrepresented the condition of the property. Paul accompanied Carol to the hearing, armed with a copy of his candid advertisement. The hearing established that the buyer fully understood that the house was represented to be generally in poor condition, but that while inspecting the house with a view to needed repairs, Carol had commented that since the house was of concrete block and stucco construction, there would be no termite worries since termites could not enter that type of construction. Carol confirmed this and her belief that the statement was correct. However, after the sale was made, the buyer ripped out a sill to replace it and found it swarming with termites, with termite damage to floors in evidence. Further questioning established that there had been no evidence of termite infestation prior to the sale, and that Carol had volunteered an assurance that she thought was well grounded. Paul, prior to the conclusion of the hearing, offered to pay the cost of exterminating the building and the cost of lumber to repair termite damage in view of Carol’s failure to recommend a termite inspection, which was the usual and customary practice in this area. The complainant stated that this would satisfy him completely. Joi Bostic Lions, Tigers, Ethics…Oh My! 11 | P a g e
Article 7 – Compensation from Buyer and Seller Edward engaged REALTOR® John to locate a small commercial property. Edward explained his exact specifications indicating that he did not wish to compromise. They agreed that if John could locate such a property within Edward’s price range, he—the buyer—would pay a finder’s fee to John. Two weeks later, John called Edward to advise that Linda, a seller, had just listed a property with him that met all of Edward’s specifications except that the listed price was a bit higher than Edward wanted to pay. Edward inspected the property and liked it, but said he would adhere to his original price range. John called Edward three days later to say that Linda had agreed to sell at Edward’s price. The sale was made and John collected a commission from Linda and a finder’s fee from Edward which was not disclosed to Linda, John’s client. Several weeks later, Linda learned about the finder’s fee that John had collected from Edward and filed a complaint with the Board of REALTORS® charging John with duplicity and unprofessional conduct. The complaint specified that when John had presented Edward’s offer at less than the listed price, she, the seller, was reluctant to accept it, but John had convinced her that the offer was a fair one and not likely to be improved upon in the current market; and that John had dwelt at length on certain disadvantageous features of the property in an attempt to promote acceptance of the offer. The complaint charged that John had actually been the agent of the buyer while holding himself out as the agent of the seller. Further, Linda asserted that John had never mentioned that he was representing the buyer or intended to be compensated by the buyer. At the hearing, John’s defense was that he had served both Edward and Linda faithfully; that he had not accepted Linda’s listing until after he had agreed to assist Edward in locating a property; and that in his judgment the listed price was excessive and the price actually paid was a fair price. Joi Bostic Lions, Tigers, Ethics…Oh My! 12 | P a g e
Article 15 – Misrepresentation of Competitor Following a round of golf early one morning, Homeowner Curtis, approached REALTOR® Lamar. “We’ve outgrown our home and I want to list it with you,” said Curtis. “I’m sorry,” said Lamar, “but I represent buyers exclusively.” “Then how about REALTOR® Sal?” asked Curtis, “I’ve heard good things about him.” “I don’t know if I would do that,” said Lamar, “while he does represent sellers, he doesn’t cooperate with buyer brokers and, as a result, sellers don’t get adequate market exposure for their properties.” Later that day, Curtis repeated Lamar’s remarks to his wife who happened to be a close friend of Sal’s wife. Within hours, Sal had been made aware of Lamar’s remarks to Curtis earlier in the day. Sal filed a complaint against Lamar charging him with making false and misleading statements. Sal’s complaint was considered by the Grievance Committee which determined that an ethics hearing should be held. At the hearing Sal stated, “I have no idea what Lamar was thinking about when he made his comments to Curtis. I always cooperated with other REALTORS®.” Lamar replied, “That’s not so. Last year you had a listing in the MLS and when I called to make an appointment to show the property to the buyer, you refused to agree to pay me.” Sal responded that he had made a formal offer of sub-agency through the MLS with respect to that property but had chosen not to offer compensation to buyer agents through the MLS. He noted, however, that the fact that he had not made a blanket offer of compensation to buyer agents should not be construed as a refusal to cooperate and that he had, in fact, cooperated with Lamar in the sale of that very property. In response to Sal’s questions, Lamar acknowledged that he had shown his buyer-client Sal’s listing and that the buyer had purchased the property. Moreover, Lamar said, upon questioning by the panel members, he had no personal knowledge of any instance in which Sal had refused to cooperate with any other broker but had simply assumed that Sal’s refusal to pay the compensation Lamar had asked for was representative of a general practice on the part of Sal. Joi Bostic Lions, Tigers, Ethics…Oh My! 13 | P a g e
Article 1 - Client’s Interest vs Personal Gain Realtor® Don was a sales associate with Sell Now Realty. To promote Sell Now’s in-house listings, the firm’s principals offered $1,000 bonuses to the company’s sales associates at time of closing on each of Sell Now’s listings they sold. Dr. Bryant, a recent transferee to the town, entered into a buyer brokerage agreement with Sell Now through Don. Dr. Bryant explained he had specific needs, foremost of which was any home he purchased be convenient for and readily accessible by Dr. Bryant’s physically challenged wife. “Part of my wife’s physical conditioning program is swimming, so in addition to everything else, I am looking for a home with a pool or room to build a pool.” Don knew there were a number of homes for sale meeting most of Dr. Bryant’s general specifications, several of which were listed with Sell Now. Over the next few days, Don showed Dr. Bryant several properties in the Black Oaks subdivision, all of which were listed with Sell Now, including one with an outdoor swimming pool. Not included among the properties shown to Dr. Bryant were several similar properties in Black Oaks listed with other firms, including one with an indoor pool. After considering the properties shown to him by Don, Dr. Bryant made an offer on the home with the outdoor pool. His offer was accepted and the transaction closed shortly thereafter. Several months later, Dr. Bryant learned about the home with the indoor pool from a colleague at the hospital who lived on the same block. He filed a complaint alleging that Don had put his interests, and those of his firm, ahead of Dr. Bryant’s by promoting Sell Now’s listings exclusively and by not telling Dr. Bryant about a similarly-priced property with an indoor pool, which suited his family’s needs better than the property he had purchased. The complaint went on to indicate that Don had received a bonus for selling one of Sell Now’s listings and that Dr. Bryant suspected that Don’s failure to tell him about the home with the indoor pool was motivated by the opportunity to receive a bonus. At the hearing, Don defended his actions stating that properties rarely meet all of potential purchasers desires; that he had made Dr. Bryant aware of several properties that met most of his requirements, including one with an outdoor pool; and that Dr. Bryant must have been satisfied with Don’s service since he had purchased a home. Upon questioning by Dr. Bryant’s attorney, Don acknowledged that he knew about but had not shown the house with the indoor pool to Dr. Bryant. He conceded that a pool that could be used year round was better suited to the family’s needs than one that could be used only Joi Bostic Lions, Tigers, Ethics…Oh My! 14 | P a g e
four months each year. He also admitted his failure to tell Dr. Bryant about the house with the indoor pool had at least in part been motivated by the bonus offered by his firm. “But,” he argued, “aside from the indoor pool, that house was no different than the one Dr. Bryant bought.” Joi Bostic Lions, Tigers, Ethics…Oh My! 15 | P a g e
Article 16 – Prospecting Expired Listings A property was exclusively listed with REALTOR® Jim who advertised it widely and invited cooperation from other REALTORS®. The property was not sold during the term of Jim’s listing, although both REALTOR® Jim and REALTOR® Barry, a cooperating broker, had shown the property to prospects. Sometime after the expiration of Jim’s listing, newspaper advertisements appeared indicating that the property was exclusively listed with Barry. Shortly thereafter, the property was sold by Barry to buyer, Kate. Jim confirmed that it was listed with Barry and then charged Barry in having failed to respect his exclusive agency status with the client by soliciting the listing. Jim’s specific charge was that Barry knew that the seller-client had originally listed the property with him, Jim, because he had discussed the property with Barry during the term of the original listing contract; that during the term of Jim’s listing, Barry had shown the property to the same individual, Kate, who had now purchased the property through Barry; and that with this knowledge Barry’s action in soliciting the listing, even after it had expired, was a violation of Article 16. Jim told the Hearing Panel that when he had asked for an extension of the original exclusive listing, the client told him that because of a family problem he intended to take the property off the market for a few months, but would consider relisting at a later date. Barry conceded that he had known of Jim’s exclusive listing at the time the listing contract was current; that he had known the term of the listing contract and, hence, knew when it expired; and that he had shown the property to Kate who eventually purchased it. However, he explained, he had no continued contact with Kate who he had originally shown the property. After the expiration date of Jim’s listing, he was approached by Kate who indicated she was still actively interested in purchasing a home. In reviewing Kate’s preferences and the market, the property in question seemed the only one that met most of Kate’s desires. Knowing that the original listing with Jim had expired some time ago, Barry simply called the owner to ask if the property had been relisted with Jim. Upon learning that Jim’s exclusive listing had not been extended, Barry told the owner of his prospective buyer, solicited the listing, and obtained it. Barry said he saw nothing unethical in having solicited the listing when it was no longer exclusively listed with another broker and felt that Jim was without grounds for complaint. Joi Bostic Lions, Tigers, Ethics…Oh My! 16 | P a g e
Article 12 – News or Advertising Shortly after mailing his “Homeowners Neighborhood Newsletter” to local residents, several complaints were filed against REALTOR® Scott claiming that he had engaged in deceptive advertising in violation of Article 12’s “true picture” directive. These complaints were reviewed by the Grievance Committee which determined that a hearing should be held and that all of the related complaints would be consolidated in a single hearing. The appropriate notices were sent and the hearing was convened. REALTOR® Beverly, one of the complainants, introduced Scott’s “Homeowners Neighborhood Newsletter” into evidence pointing out that, on the first page, Scott had prominently shown pictures of, and addresses for, ten homes in an exclusive area of town labeling each as “Recently Sold.” Beverly, the listing broker for several of these properties, stated that, in her opinion, the average reader would readily conclude that Scott, by advertising this way, was claiming to have listed and sold the properties and that his claims violated Article 12, as interpreted by Standard of Practice 12-7. In response, Scott indicated that Article 12 was limited in scope to “. . . advertising and representations to the public” and that his “Homeowners Neighborhood Newsletter” was not, in fact, advertising but rather a well-intentioned effort to make homeowners aware of current market values. “Sale prices in our county become a matter of public record once a deed of sale is recorded,” Scott argued, “and anyone who wants to find out about recent sales can get that information from the recorder’s office.” “All I am doing,” he continued, “is reporting news—and saving residents the time and effort of retrieving this information on their own. If someone appreciates my efforts and later buys or sells through me, so much the better, but that is not the reason for my newsletter.” Joi Bostic Lions, Tigers, Ethics…Oh My! 17 | P a g e
Article 1 – Renegotiating Commission Realtor® Chase listed Brook’s house at a reasonable price and aggressively advertised the property on the MLS, website and other methods intended to attract prospective buyers. Several potential purchasers showed interest. Buyer Gary saw Brook’s property on Chase’s website, called for information, and was shown the property by Chase several times. After the third showing, Buyer Gary was ready to make an offer and requested Chase’s assistance in writing a purchase offer. Chase helped Gary prepare an offer and then called Brook to make an appointment to present the offer that evening. Buyer Patrick, looking for property in the area, engaged the services of Realtor® Carrie as a buyer representative. Brook’s property was one of several Carrie introduced to Patrick. Later that same afternoon, Carrie called Chase and told him that he was bringing a purchase offer to Chase’s office for him to present to Brook. Chase responded that he would present Patrick’s offer that evening. That evening, Chase presented both offers to Brook and he noted that both were full price offers with little difference otherwise. Chase responded, “They’re both good offers and they’ll both net you the same amount.” Brook asked about the feasibility of countering one or both of the offers. Chase cautioned that countering a full price offer could result in the buyer walking away from the table. Besides, he reminded Brook, production of a full price offer triggered Chase’s entitlement to a commission under the terms of their listing agreement. Brook acknowledged that obligation but expressed regret that, faced with two full price offers, there was no way to increase the proceeds he would realize from the sale of his property. “I’ll tell you what,” said Brook, “if you’ll reduce your commission, I’ll accept the offer you procured. While you’ll get a little less than we’d agreed in the listing contract, you’ll still have more than if you had to pay the other buyer’s broker.” Seeing the logic of Brook’s proposal, Chase agreed to reduce his commission by one percent. Brook, in turn, accepted Gary’s offer and the transaction closed shortly thereafter. Upset that his purchase offer hadn’t been accepted, Patrick called Brook directly and asked, “Just to satisfy my curiosity, why didn’t you accept my full price offer to buy your house?” Brook explained that he had accepted a full price offer produced by Chase because of Chase’s willingness to reduce his commission by one percent. Patrick shared Brook’s comments with Carrie the next day. Carrie, in turn, filed an ethics complaint alleging that Chase’s commission reduction had induced Brook to accept the offer Chase had produced, that Chase’s commission reduction made his presentation of the Joi Bostic Lions, Tigers, Ethics…Oh My! 18 | P a g e
competing offer less than objective and violated Article 1, as interpreted by Standard of
Practice 1-6, and that Chase’s failure to inform him of the change in his (Chase’s)
commission arrangement violated Article 3, as interpreted by Standard of Practice 3-4.
Article 10 – Choose Your Neighbor
REALTOR® Lauren listed a property in a new subdivision. At the instruction of her client,
Delores, Lauren submitted information to MLS with instructions not to make public, did not
place a “For Sale” sign on the property and did not advertise the property on her website or
in the local newspaper. Delores had told Lauren that she wanted the sale handled quietly,
with the new purchasers being people who would “fit into the neighborhood—people with
the same socioeconomic background” as the other residents of the subdivision.
Based on her conversation with Delores, Lauren’s only marketing effort was mailing a letter
to the other residents of the subdivision, inviting them “. . . to play a part in the decision of
who your next neighbor will be. If you know of someone who you would like to live in the
neighborhood, please let them know of the availability of this home, or call me and I will be
happy to contact them and arrange a private showing.”
Lauren’s marketing strategy came to the attention of REALTOR® Ron, whose mother lived
in the subdivision. Ron filed a complaint charging Lauren with a violation of Article 10 of
the Code of Ethics.
At the hearing, Ron told the Hearing Panel of receiving a copy of the marketing letter from
his mother, who had recently moved to the subdivision. Ron advised the panel that he had
checked the MLS for information on the property, had driven past the house to look for a
“For Sale” sign, had viewed Lauren’s website and had scanned the Sunday real estate section
of the local newspaper for information on the property. Finding no mention of the property
in either the MLS, website or the newspaper and noting the absence of a sign on the
property, Ron concluded that Lauren’s marketing strategy was to limit access to the
property to individuals preselected by the current residents. “In my mind,” said Ron “this
could only mean one thing. Lauren was deliberately discriminating against home seekers
Joi Bostic Lions, Tigers, Ethics…Oh My! 19 | P a g efrom other areas, or those with different backgrounds, who would never have the opportunity to learn about the house’s availability. Obviously, Lauren was directing all of her marketing energies into finding purchasers who would not disrupt the ethnic and economic character of the neighborhood.” Lauren defended her actions by advising the panel that she was acting on Delores’ instructions. Delores appeared as a witness for Lauren and confirmed this fact, adding that she and the other residents of her block had an informal agreement that they would try to find “suitable” purchasers for their homes if they ever decided to sell. Delores felt that by broadening the marketing campaign to include all residents of the subdivision she had increased the chances of finding such potential purchasers. Joi Bostic Lions, Tigers, Ethics…Oh My! 20 | P a g e
Article 12 – True Picture à “Sold” Sign REALTOR® Michael, the listing broker, was charged by REALTOR® Rita Marie with giving a false picture in his advertising by putting up a “sold” sign on property that had not been sold. Michael was notified of the complaint and of the date of a hearing on it scheduled before a Hearing Panel of his Board’s Professional Standards Committee. Undisputed testimony offered during the hearing revealed that Michael was an exclusive agent, offering Christina’s home for sale. Buyer Doug made an offer with earnest money and Christina made a counter offer which Doug accepted. At that point, Michael put up his “sold” rider on his yard sign. Several days later, Doug received an unexpected notice from his employer that he was to be transferred to another city. Doug immediately contacted Michael about his predicament. In an amicable discussion, it was agreed that everyone had acted in good faith; that the property was readily marketable; that the earnest money deposit would be refunded; and that Michael would put the property on the market again. A week later, when REALTOR® Rita Marie was showing a number of houses to a prospective buyer, they drove by Christina’s property, and the prospect casually said that she didn’t understand the “sold” sign, since she had been taken to see the house that morning by Michael. Rita Marie contended that a “sold” sign is a measure of a Michael’s advertising, and that it cannot give a true picture if it is put up prior to the closing and actual transfer of ownership. Joi Bostic Lions, Tigers, Ethics…Oh My! 21 | P a g e
ADDITIONAL NOTES: Joi Bostic Lions, Tigers, Ethics…Oh My! 23 | P a g e
Georgia Association REALTORS® Partners in Education
Student Course / Instructor Evaluation
Course Name _____________________________
Instructor ________________________________
Date _____________________________________
FOR IN-CLASSROOM ONLY. Livestream classes will be sent electronic evaluation link.
PLEASE FILL IN THE BUBBLES COMPLETELY SO ANSWERS ARE SCANABLE.
Please do NOT use check marks, x's or any other type of mark.
The instructor encouraged my participation through questions and answers or exercises.
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
The instructor presented ideas clearly and made the subject matter interesting.
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
The use of the outline / handouts for study and / or reference was helpful.
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
The topic is relevant / helpful to my real estate activities.
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
I would want this instructor back.
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Additional Comments:
Thank you for your input. (Revised 52017)
© 2017 Inspironix, Inc. (916) 4883222 InspiroScan Survey Form PIE Instructor / Course Evaluation v5 Side 1You can also read
