RE/MAX AROUND ATLANTA
  • Home
  • RMAA HUB
  • Events
  • Local Service Providers
    • Attorney Partners
    • Lender Partners
    • Home Cleaning Services
    • Home Inspection Companies
    • Home Warranty Companies
    • Insurance Providers
    • Moving Company
    • Photography
    • Property Management
    • Repair Services
    • Residential Renovations
    • Security Systems
  • OUR TEAM
  • Online Payments
  • BROKER CORNER
  • Locations
  • MAXtech
  • Request Field Services

BROKER CORNER

Broker to Broker Responsibilities

3/18/2021

1 Comment

 
Picture
If there are previous listing brokers or buyer brokers that represented a prospect that wants to be your client, what are your responsibilities?
These situations come up daily.  A seller or a buyer wants to change agents and calls you.  Or a buyer is referred to you, but the buyer had been looking at houses with another agent. Or you want to list a property that has been listed by another broker.
Be very careful.  You could be violating both Georgia law and the NAR Code of Ethics.  Each carries its own consequences.
If there is an active written agreement with another broker and the prospect, you have to honor that agreement and back away until you are certain that no active agreement exists.  Even if a brokerage agreement has expired, there may still be a protection period that has to be honored.
These rules need to be top of mind:
  • NAR Code of Ethics Article 15 (plus 3 Standards of Practice)
  • NAR Code of Ethics Article 16 (plus 20 Standards of Practice)  
  • Georgia License Law Code § 43-40-25 Unfair Trade Practices, particularly #13 and #14.

Article 15: REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.
​
Article 16:  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. 
Georgia Code §43-40-25(13): Inducing and party to a contract of sale or lease, or a brokerage agreement to break such contract or brokerage agreement for the purpose of substituting in lieu thereof any other contract or brokerage agreement with another principal is an Unfair Trade Practice.
 
Georgia Code §43-40-25(14) Negotiating a sale, exchange, or lease of real estate directly with an owner, a lessor, a purchaser, or a tenant if the licensee knows that such owner or lessor has a written outstanding listing contract in connection with such property granting an exclusive agency or an exclusive right to sell to another broker or that such purchaser or tenant has a written outstanding exclusive brokerage agreement with another broker, unless the outstanding listing or brokerage agreement provides that the licensee holding such agreement will not provide negotiation services to the client;
Of course, the fact that an exclusive agreement had been entered into previously with a REALTOR® shall not preclude or inhibit any other REALTOR® from entering into a similar agreement after the expiration of the prior agreement. 
You cannot claim ignorance because you did not ask the prospect if there is an existing brokerage agreement.  You have to ask. REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service.  (Standard of Practice 16.9)
Examples:
  1. REALTOR® A listed and put a property under contract with a co-op agent, shortly after the property went on the market.  Another agent, REALTOR® B, unrelated to the listing and sale, approached the Seller and offered her services as superior to the engaged listing agent.  The Seller then terminated the brokerage relationship with the Listing Agent.
 
REALTOR® B is clearly in violation of multiple sections of both Article 16 and the NAR Code of Ethics and was reprimanded by her Broker.  REALTOR® A, the listing broker, is due a commission from the sale made while the listing was active. 
 
Also relevant to this situation is the prohibition against dealing with a principal when a property is exclusively listed. (Standard of Practice 16-13).  All communication must be with the Listing Broker.  There is also a probable violation of the prohibition against knowingly obligating a principal to pay more than one commission (Standard of Practice 16-14).

  1. REALTOR® A listed a property, but withdrew it shortly after it went on the market at the request of the Seller, due to family circumstances.  It remained off the market for 4 months.  REALTOR® B showed the property during the period that it was on market and wrote an offer, which was rejected.  At the end of 4 months, the Seller contacted REALTOR® B and offered to negotiate with REALTOR® B’s buyer before the Seller put it back on the market.  REALTOR® B inquired whether there was an active brokerage agreement or a protected period. There was not.  REALTOR® B may negotiate directly with the Seller.  The fact that a prospect has retained a REALTOR® as an exclusive representative or exclusive broker in one or more past transactions does not preclude other REALTORS® from seeking such prospect’s future business. (Standard of Practice 16-7)
 
  1. Buyer A was so impressed with REALTOR® A’s services that she referred Buyer B to REALTOR® A. When asked by REALTOR® A, Buyer B said she had an active Buyer Brokerage Engagement with another REALTOR and wanted advice to get out of it.
 
When REALTORS® are contacted by the client of another REALTOR® regarding the creation of an exclusive relationship to provide the same type of service, and REALTORS® have not directly or indirectly initiated such discussions, they may discuss the terms upon which they might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement. (Standard of Practice 16-6) No action that is inconsistent with the current representation may be taken.  That includes advising a buyer or seller of how to terminate a brokerage engagement and, of course, no disparagement of the current broker.  You can say what your terms would be when the current engagement is over, but that’s all.  You’ll talk when there is not an active engagement. 
There is a caveat. If asked and a listing or buyer’s broker refuses to disclose the expiration date of an exclusive agreement, a REALTOR® may contact the principal to secure such information and may discuss the terms upon which the REALTOR® might enter into a future agreement or, alternatively, may enter into an engagement to become effective upon the expiration of any existing exclusive engagement. (Standards of Practice 16-4 (Listing) and 16-5 (Buyer/Tenant))

  1. Case #16-2: Respect for Agency. Decision by the Professional Standards Committee.
Client A gave a 180-day exclusive right to sell listing of a commercial property to REALTOR® B, specifying that no “for sale” sign was to be placed on the property. REALTOR® B and his sales associates started an intensive sales effort which, after three months, had produced no offer to buy, but it had called attention to the fact that Client A’s property was for sale. When REALTOR® C heard of it, he called on Client A, saying that he understood that his property was, or soon would be, for sale, and that if Client A would list the property with him exclusively he felt confident that he could provide prompt action. Client A said the property was exclusively listed with REALTOR® B under a contract that still had about 90 days to run.
“In that case,” said REALTOR® C, “you are bound for the next 90 days to REALTOR® B. I have a really outstanding organization, constantly in touch with active buyers interested in this class of property. I am in a position to render you an exceptional service, and I will plan to call you again in 90 days or so.”
The property remained unsold during the term of REALTOR® B’s listing contract. REALTOR® C called again on Client A, and obtained his assurance that he would sign an exclusive listing of the property upon expiration of the listing contract.
When REALTOR® B called on Client A on the last day of the listing contract to seek its renewal, Client A told him of REALTOR® C’s two visits. “I was impressed by REALTOR® C’s assurance of superior service” Client A told REALTOR® B, “and in view of the fact that my listing with you produced no definite offer in the 180-day period, I have decided to give REALTOR® C a listing tomorrow.”
REALTOR® B filed a complaint with the Grievance Committee of the Association, outlined the facts, and charged that REALTOR® C’s conduct had been inconsistent with Article 16 of the Code of Ethics. The Grievance Committee referred the matter to the Professional Standards Committee.
The panel found that REALTOR® C had violated Article 16 by failing to respect the exclusive agency of REALTOR® B. The panel’s decision advised that REALTOR® C’s original contact with Client A, made at a time when he had no knowledge of REALTOR® B’s exclusive listing, was not in itself unethical, but that as soon as he learned of REALTOR® B’s status as the client’s exclusive agent, he should have taken an attitude of respect for the agency of another REALTOR®, and refrained from any effort to get the listing until after the expiration date of the original contract.
REALTOR® C’s attitude of regarding the client’s relationship with REALTOR® B as a kind of misfortune, of presenting his own service as superior to REALTOR® B’s, and of suggesting to the client that, having a better capacity to serve him, he could wait until REALTOR® B’s listing had expired, was, the panel said, contrary to the respect for another REALTOR®’s exclusive agency required by Article 16.
The Hearing Panel’s decision further advised REALTOR® C that he would have conducted himself in accord with Article 16 if, upon learning of REALTOR® B’s status as exclusive agent, he had expressed his willingness to cooperate with REALTOR® B in the sale of Client A’s property.

  1. Case #16-5: Solicitation of Expired Exclusive Listing                          Decision by the Professional Standards Committee.
A property was exclusively listed with REALTOR® A who advertised it widely and invited cooperation from other REALTORS®. The property was not sold during the term of REALTOR® A’s listing, although both REALTOR® A and REALTOR® B, a buyer representative, had shown the property to prospects.
Sometime after the expiration of REALTOR® A’s listing, the listing appeared on REALTOR® B’s website. Shortly thereafter, the property was sold by REALTOR® B.
REALTOR® A confirmed that it was listed with REALTOR® B and then charged REALTOR® B in having failed to respect his exclusive representation status with the client by soliciting the listing. The Grievance Committee referred the complaint for hearing by a Hearing Panel of the Professional Standards Committee. Upon due notice to the parties, a hearing on the complaint was called with REALTORS® A and B present. REALTOR® A’s specific charge was that REALTOR® B knew that the client had originally listed the property with him, REALTOR® A, because he had discussed the property with REALTOR® B during the term of the original listing contract; that during the term of REALTOR® A’s listing, REALTOR® B had shown the property to the same individual who had now purchased the property through REALTOR® B; and that with this knowledge REALTOR® B’s action in soliciting the listing, even after it had expired, was a violation of Article 16.
REALTOR® A 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.
REALTOR® B conceded that he had known of REALTOR® A’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 the individual who eventually purchased it. However, he explained, he had no continued contact with the prospect to whom he had originally shown the property. After the expiration date of REALTOR® A’s listing, he was approached by the individual to whom he had originally shown the property and who was still actively interested in purchasing a home. In reviewing the purchaser’s stated requirements and reviewing the market, the property in question seemed to correspond more closely than any other available properties. Knowing that the original listing with REALTOR® A had expired some time ago, REALTOR® B simply called the owner to ask if the property had been relisted with REALTOR® A. Upon learning that REALTOR® A’s exclusive listing had not been extended, REALTOR® B told the owner of his prospective buyer, solicited the listing, and obtained it. REALTOR® B said he saw nothing unethical in having solicited the listing when it was no longer exclusively listed with another broker and felt that REALTOR® A was without grounds for complaint.
The panel concluded that it was not the intent of Article 16 to provide any extended or continuing claim to a client by a REALTOR® following the expiration of a listing agreement between the client and the REALTOR®. The panel concluded that REALTOR® A had not been successful in his efforts to sell the client’s property and that neither the property owner nor other REALTORS® should be foreclosed from entering into a new listing agreement to sell the property.
The panel concluded that REALTOR® B was not in violation of Article 16 of the Code of Ethics.
1 Comment
Business Brokers In Arizona link
3/5/2022 07:31:36 am

When it comes to selling a business, many people think that the process is as simple as putting a "For Sale" sign in the window and waiting for the offers to come flooding in. However, this is not always the case. In order to get the best price possible for your business, it is often necessary to work with a business broker.

Reply



Leave a Reply.

    RMAA

    Real Estate News, Brokers Blog & More

    Categories

    All
    Broker's Corner
    Mortgage Minute

    Archives

    May 2025
    April 2025
    March 2025
    February 2025
    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    May 2024
    April 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    July 2020
    June 2020
    May 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019

    RSS Feed

RE/MAX AROUND ATLANTA
Phone # 404-252-7500
RE/MAX Around Atlanta licensed in the State of Georgia

© COPYRIGHT 2025. ALL RIGHTS RESERVED.
  • Home
  • RMAA HUB
  • Events
  • Local Service Providers
    • Attorney Partners
    • Lender Partners
    • Home Cleaning Services
    • Home Inspection Companies
    • Home Warranty Companies
    • Insurance Providers
    • Moving Company
    • Photography
    • Property Management
    • Repair Services
    • Residential Renovations
    • Security Systems
  • OUR TEAM
  • Online Payments
  • BROKER CORNER
  • Locations
  • MAXtech
  • Request Field Services