We should all remember the impatient child, sitting in the rear seat of the car, whining, and complaining, and asking “are we there yet?” We probably all said it as children and remember our own children doing the same thing.

We all went through a significant upheaval in our business as the new rules from NAR went into effect in August of this year. While we had months to prepare and learn, when the day arrived, it seemed as if the wheels came off the bus. Many claimed that it was nonsense, some felt it was an overreaction, while others seemed to acknowledge the obligations and work through it.

Now, about 90 days later, are we done? Have we seen the total impact of what has changed? Sadly, we are not done and have not yet seen the full impact, yet.

On August 17, 2024, we stopped offering compensation from the listing agent to the buyer’s agent in the MLS, as a “unilateral offer of compensation”  That was one change that resulted from a settlement between NAR along with several major brokerages, with the Justice Department and several judges on anti-trust suits, claiming that NAR and the companies conspired to fix prices for real estate services. Rather than fight the charges in a long-drawn-out court battle, NAR offered a settlement, without admitting guilt, while offering practices changes including the offer of compensation. Another part of that change was the requirement of all Realtors to establish a written representation agreement with every client.

What is next? First, a quick observation. AAR has revised and/or developed several forms to assist us in requesting and obtaining compensation from the listing agent, the seller or the buyer. From only one, two of them, or all 3.

Schools and instructors started presenting classes and teaching how to use the 4 key forms; the Commission Agreement Between Brokers (CABB), Seller Compensation Addendum (SCA) the revised Exclusive Buyer Broker Agreement (BBEEA) and the Buyer Broker Agreement to Show Property. (BBSP). Within a few weeks of classes being taught, the Designated Brokers began forming their own policies of how and when to use the forms, which often was different from what the students learned in class, and what the other brokers decided to do.

As a result, rather quickly, the brokers have seemed to retreat to neutral corners and have come out swinging. Meaning, they are asking their agents to unlearn what was provided in many classes and do it their way.

Any broker is entitled to create policies and rules as they see fit, for the operation of their brokerage.

That said, we have heard about some tussles between agents, when one agent, under their broker’s rules, uses a form or forms in such a way that the other agent has different instructions from their broker. In most cases the differences were resolved with simple communication. Yes, communication. Let’s go back to talking to each other.

That said, we will still see more challenges as many more agents start getting involved, who might have been on the sidelines for the past few months.

Another upcoming change will be the structure and operation of the local, state and national associations. There is a great deal of pressure on all fronts for transparency, as many groups are questioning the long-standing tradition of obtaining MLS access through an association, how the broker interacts with the associations, and how the licensees obtain all their services.

NAR is under significant pressure after some internal upheaval, and critical news about excessive payments by NAR executives for lavish parties, transportation, meals, gifts, travel and more. As leadership tries to address the concerns, the rumblings on the ground are getting louder and louder.

When the annual dues bills come out in December, the NAR economist estimated a loss of about 8% of membership. With 1.6 million Realtors, that would equate to about 128,000 Realtors not renewing their membership. Some outsiders with good internal knowledge place that estimate closer to 12%.

With the loss of revenue of maybe 160,000 members not renewing, along with the pressure of other members for an explanation of the lavish expenses, we might see some major upheaval in the national association. Combine that with the pressure from the local and state associations creating their own MLS, contract forms and class of members, thus leaving NAR, we can anticipate some significant changes which will result in choices many licensees will face in the upcoming year.

In summary, we are not there yet.

Be patient yet be willing to listen to them. A good agent is one that can listen more than they talk, and find what the reason is for their fence-sitting, and what needs to happen for them to jump in. If you have been there for them, and are there now, when they jump off the fence, they will be ready to work with you.

For decades, Arizona has had Privacy Laws that include illegal eavesdropping.

Arizona implements a one-party consent law, which prohibits one party from listening in to another party without that party’s knowledge or consent. As a result, it would be considered a Class 6 felony to violate this law.

The Arizona Statutes covering this are A.R.S. § 13-3005, -3012(9).

What does this mean for you? 20+ years ago, most homes were not “smart”, meaning they had no wi-fi connected devices that watched, listened, or recorded motion, activity, or speech. But now, you probably will not find a listing that does not have some sort of “monitoring” device.

Thus, a seller that has any such devices should, at the very least, disclose in some fashion that these devices are on the property and might record anyone visiting the home. Listing agents should consider the disclosure in the MLS private remarks that home contains self-actuated listening devices. The most common are: (I only list names for the purposes of identifying items).

• Ring Doorbell Video Cameras
• Motion sensor devices (indoor or outdoor that sense and record activity)
• Security cams (indoor and out) that record video and sometimes audio
• Nanny cams and other indoor devices that monitor activity
• Alexa, Echo, Dot and other devices that provide music, timers, answers, etc., yet often can be programmed to listen and record.

In addition, a seller might have a flyer or page at the front lobby of the house that the home has listening devices. That could be a stack of handouts on a table, or a stand-up placard with some print or images that stand out and catch someone’s attention.

For the buyer’s agent, knowing this fact or not, should caution their buyer’s not to say anything outside or inside the home that they would prefer the seller not to hear. Some agents have reported some racist comments about the seller, or insults like “what blind idiot decorated this house” or comments about the condition that could insult the seller, or even some comments like “we love this house so much, we would pay well over list price”.

All of these types of comments could and do get recorded. Thus, the buyer’s agent should counsel the buyer, on their way to any listing, not to make any unsolicited comments. Even if the buyer’s agent asks “…so what do you think of this one?”, the answer could be insulting or damaging. A response such as “we can consider this one” is fine, but if the buyer says “nope, could not live in this S**T hole…” could be very insulting.

As a result, both agents have an obligation of disclosure, good counseling and protecting their client.

If not already, our industry will be doing a complete 180 as it relates to our way of doing business. The traditional, tried-and-true process of the listing broker offering compensation to the buyer brokers through the MLS will come to a screeching halt on or about August 17, 2024. Many brokers have already started the process by offering $0 compensation to the buyer’s agent in the MLS. By August 17, the listing agent/broker will be prohibited from offering compensation through the MLS.

In a nutshell, our industry operated with impunity or so we thought. For many reasons, over the past 5 decades, we have operated showing the buyers and sellers that we were price-fixing, based on what we said out loud, in our advertising and what we ignored from other agents. The result, even though we can pound the table and say no, we were showing that we were price-fixing. If you disagree, look at a random 100 MLS listings, and focus on the co-broke. Without saying it out loud or here in writing, you will find at least 80 -90% of them offering the same compensation.

Who made the decision to create that same compensation? Or did it naturally reach and settle at that amount over the decades.

There is no one person or entity that created the problem. We know the problem, so must work to remedy it soon. The new rules from NAR as part of the settlement agreement with the courts lays out the changing rules, as discussed here.

The concept of every REALTOR paying or looking for a specific amount of money will all change. Yes, the seller may still pay some compensation to the buyer’s agent, but it will not be a direct offer in the MLS; it will be a response to buyer’s agent request for compensation. That request should be based on two factors:

1. How much the buyer offers their agent on the Buyer-Broker form, or other forms where the buyer agrees to pay some or all of the agent’s compensation. The buyer agent must decide, apart from any previous rate of compensation, what they would expect as a total compensation from one or both parties.
    
2. Any wording in the listing to buyer broker’s, such as the “seller will consider a request from the buyer agent…”, without stating a specific dollar amount or percentage. Listing agents will be required to talk to their sellers as to the language and the amount they might offer upon a request.

If a listing agent gets push-back from the seller, then the agent should alert the seller that without any compensation to buyer agent, the listing might have limited showings.

Aside from other changes, one change in practices will create challenges for many agents.

First, the REALTOR Code of Ethics has always required of us that we determine and establish our compensation before commencing any effort to accept the offer of cooperation. Once a listing agent offered us the co-broke compensation, we make that determination right away, as the offer of compensation from the listing agent was a unilateral offer, which required no response or acknowledgement.

Next, we must recognize that the offer of compensation in the MLS will go away, thus there will be no establishment of compensation through the offer of cooperation. Meaning, unless a buyer’s agent has established their FULL compensation from the buyer via the Buyer-Broker Agreement, they are prohibited from showing a listing unless they have established that from all sources.

Example, the agent would like $18,000 compensation from a specific sale (dollar amounts used rather than a specific commission rate). They negotiated a buyer broker agreement with their buyer, for $12,000. As such, when the agent identifies a property that they would show their buyer, the agent must stop right there, and reach out to the listing agent, in any fashion, to determine if the seller will offer any compensation. There will be new AAR forms to make that request.

Here are the “what-ifs”:

1. The listing agent says yes, the seller will offer $4000. If the buyer is fully prepared to pay the $12000, that would mean $16,000 to the agent. They wanted $18,000. This will be business decision to either negotiate more with the listing agent and the seller for more than the $4,000. It would be difficult at that point to ask the buyer for more, since your contract with them says $12,000.
    
2. The listing agent says yes, and the seller will offer $10,000. The buyer agent has a decision. Accept the $10,000 from the seller, and reduce what the buyer owes them, to reach the $18,000 total. DO NOT ACCEPT BOTH IN FULL THAT WOULD EXCEED THE $18,000. Since the agent has a fiduciary obligation to their buyer, they should make the effort to obtain as much as possible from the seller.
    
3. The listing agent says no and refuses to negotiate. That would mean either accept the full compensation of $12,000 from the buyer, and show the property, or negotiate with the buyer. However, if the buyer agreed to pay you $12,000, that is a contractual agreement, so it would be hard to revise that contract.  In this case, you could and even should tell the listing agent that they will not show the house since the seller is not offering any compensation. That is a slippery slope, since you do not want to “threaten” the seller. Allow your broker to help you here.

Once this all plays out, and both agents feel more comfortable in negotiating with their client, there will be a reckoning as to the level of compensation. Yes, this could cause a lower level of compensation to both agents, that we will all need to work through.

Remember; if you show a listing to your buyer, before establishing any compensation from the seller, you have essentially waived any compensation from the seller or listing agent, meaning your only compensation will be what the buyer broker states. If you failed to obtain a buyer broker agreement, or any agreement from the buyer to compensate you, you will work for free!

The harsh reality is this; agents will need to work harder and be more diligent when negotiating with the clients, all the while probably seeing a reduced amount of income in most transactions.

Maybe not so much today, but for decades, walk into a baseball stadium, and some barker was yelling that phrase along with “you can’t tell the players without a scorecard...”

It sort of feels that way today with AC refrigerants in new units, in older units, and what is coming.

Any refrigerant is part of the broader category of fluorocarbons. While all refrigerants have the same result, the chemical composition changes from product to product. R-22, Freon, which, since the 1950s was the standard bearer for decades, in AC units, in your car AC system, your refrigerator and numerous other consumer products. After the 1987 Montreal Protocol, it was determined that the chlorine component of R-22 was damaging the ozone layer of the planet.

In January 2010, The US Government banned the production and import of R-22, with a 2-decade phase out of the usage and distribution of the product.

R-22 Freon is still available, but the cost has skyrocketed, from $15-24 per pound, to $150- $200 per pound. The typical home AC system requires about 8 – 10 pounds of refrigerant. The newer refrigerant to replace Freon was R-410a, also known as Puron. It has been around since the early 1990s, but became the product of choice once Freon started being phased out in the 2010’s. Most AC units built in the early to mid-2010’s contained Puron.

That was short-lived, since in December 2022, the EPA announced a planned phase-out of R-410a Puron, commencing in 2025. The replacements already being marketed are R-32, Forane or R-454b, marketed as Puron Advance, Opteon XL and Solstice 454b.

Lastly another possible replacement, R-466a, is available for usage in certain units. A qualified AC technician will determine the units’ age, what refrigerant is in use now, was the unit retrofitted to accommodate a certain refrigerant and so on. It is entirely possible that if your seller has a newer unit, that uses R-410a, it might require any of the 3 alternatives, based on several factors.

Why do we care? Is your seller obligated to disclose the material facts about their current AC system?

Should your buyer be certain of the age and refrigerant used currently?

Yes and Yes. If we look at lines 105-111 of the current Residential SPDS (February 2023 version), the seller should disclose the age of the unit, the type of refrigerant, and any awareness of service issues and maintenance.

If your seller is not sure which refrigerant is in the unit, they have options on how to determine that information, ranging from reviewing repair invoices from an AC contractor, calling the AC contractor, finding the unit serial number, and searching that on-line. That may be found on a metal plate or sticker attachment on the outside unit that has the model number and serial number. Search that, and it will result in the manufacturers identity of the unit, age, refrigerant and other factors.

While we are not experts and not obligated to determine the refrigerant and any inherent issues, we should always recommend the buyer have the system(s) inspected as part of their due diligence.

Do you still want to walk past the barkers and not buy the scorecard?

While we often pound our chests and claim we are professionals, many agents demonstrate just the opposite.

In our ever-changing market, with far more changes to come, buyers and sellers are looking for other ways to handle their real estate needs. More so than in recent decades, we must be in a position to convince a potential client that we are the professional that stands out above the other agents. Clients are looking for intelligent agents that provide a lot more than a nice photo and a listing in the MLS. If they seek an agent, they want someone with experience, a good track record, and an agent that shows their commitment to the industry and their career.

Here are some issues that clients will look at to determine if they feel comfortable working with you.

Your phone number. Using a phone number with an out of state area code. How committed are you to Arizona real estate when your phone is registered elsewhere? Clients that want serious agents will often pass you if you do not show you are a professional. Since so many people move here, and then obtain a real estate license, many keep the original phone number, “just in case…” Meaning, if Arizona and/or real estate does not work out, maybe they will go back. Does that say “professional?”

And as many of us become defensive when answering the phone, with more and more criminals trying their best to get something from us over the phone, out of state area codes are one of the first things people ignore or block those calls.

Free email accounts? Your email address can say a lot about you. First, is it a free domain such as Gmail, Hotmail, and others like it, might show the client that you do not take your career seriously if you would not spend a few dollars every year in a professional domain. Some agents choose to use the free email account that their brokerage provides and this email looks far more professional than a free web-based domain. There is nothing wrong with the free services mentioned above. Are they less secure than your own domain, or your brokerage domain? No. Any email account is subject to hacking, regardless of the service.

Invest in your career and obtain an email domain that better reflects professionalism, rather than a domain that is web-based and free. Most email hosting companies will provide an email domain for low fees. For example, I have jon@jonkichen.com which looks and feels professional, and it costs less than $100 per year. It is simple to set up and maintain, and it shows your clients that you are a professional willing to invest in their business. For the cost of one coffee-shop cup a month, you could have a professional domain.

If you want or expect people to call you, ANSWER the phone!

If not, then activate and personalize your voicemail. One that says, “Please leave your message for 801-439 xxxx) shows that you did not even care to set up a simple message. And nothing is more frustrating when the caller takes the time to call, and listen to your message, only to hear that the mailbox is full and cannot accept more messages. Do you think that person (potential client) will call you back?

Your car… your license plate. Maybe the tags from your previous state costs $40 a year yet would cost $420 a year here. But what does that say to clients when you drive up, or ask them to get into your car, when they see an out of state license plate?

And if you want the buyers to get into your car, look at it. Clean? Inside and out?

Stuff on the seats and floor? Debris, food stuff, baby seats, etc.

As most agents use the same vehicle to drive buyers around and do the weekend outings with the family, the vehicle should be as clean and clutter free as possible when buyers might be sitting in your car.

And how does it smell inside? There are some vehicle air freshers that can be hidden and have a good effect on the interior smell, yet be careful with overloading the odor, as many people are sensitive to perfumes and manufactured odors from air fresheners. If you are a smoker, and you try to hide the odor with heavy air-fresheners, that can be overpowering to many people.

If you are going to be in the real estate business here in Arizona, it is best to show you are a professional and you are invested in your business. Yes, you might save money by keeping your out-of-state phone number, your fee email account and your license plates, but what does that say about you?

My blog last month talked about the recent lawsuits around the country, against several national brokerage firms, as well as NAR. As those lawsuits are settled, or adjudicated by judge and jury, it has become abundantly clear that our way of doing business will soon be a thing of the past.

 While many parts of our daily role working with buyers, sellers, landlords and tenants will stay in place, one major area (and the core basis of many of the suits) will see a 180-degree shift. This primarily deals with how the listing broker and the buyer agent are compensated in a transaction.

The suits had one common thread: price-fixing. While the prosecuting attorneys had no proof of collusion or joint efforts to affix prices between companies, brokers, agents and even Associations of Realtors, including local, state and national, they did make a convincing arguments that the parties were fixing prices based on the messages delivered in marketing and promotion.

Case in point. May an individual broker decide that his agents will charge X%, nothing more, nothing less? Yes, since that is a brokerage operational rule. But the cases pointed to a brokerage with 800 agents, all independent contractors, and thus, what right does the broker have in determining what the IC’s charge? It does raise an interesting question.

As the plaintiff’s attorneys did, if you randomly ask 100 people on the street, “how much do real estate agents get paid”, most will have an answer, based on a number of factors. Mostly, based on what we tell sellers and sometimes buyers the basis for what we charge. Many sellers claimed, when interviewed, that the agent justified what they were charging based on “that’s what everyone else charges…” That alone spells price fixing.

But here is the common situation that gets us all in trouble. An agent is doing several types of marketing to gain listings and uses the tag line “we charge less”.

Then they expand on that concepts, and claim “we charge less than any other broker out there…” You have seen and heard the ads.

First, how does a competing broker know what I charge? They assume, but do not know. But their statements perpetuate the concept of fixing prices.

As Realtors, we see it one way, but the average rank-and-file consumer who is receptive to marketing ads to sell their house would reach the conclusion that “everyone else charges one rate, yet this one broker charges less”. If all the other brokers charge the same, then clearly, in the mind and eyes of the judges and jury, that is price fixing.

So, what is the 180-degree shift? We have already seen the changes in the month since my recent blog. Many Associations of Realtors and ARMLS type entities around the country have changed their guidelines to get away from a minimum or reasonable offers of co-broke compensation, and now allow a broker to offer $0 to the co-broke agent. And many agents have stated, just in the previous few weeks, that all of a sudden, a lot of listings now offer $0 compensation.

The push is to eliminate any offer of co-broke compensation. It is already here. Thus, if you have the buyer, and my listing shows $0 compensation, how and from whom are you paid?

This will push us, kicking and screaming, into using the Buyer Broker form, negotiating with your buyer to pay you (just like when you negotiate your listing compensation with the seller).

This requires many agents in AZ to embrace the use of a form that they have resisted using for decades, for whatever there reason was.

Think about this; most buyers have no concept of how much you will be paid, and who is paying it. We have always negotiated with sellers for our listing compensation, but we almost never have negotiated compensation with a buyer.

On this website calander, you will now find classes on the Buyer/Broker Agreement. Most are done by this author, yet we have a few instructors teaching the same classes around the valley and state.

If you are one of the agents who have rejected the buyer broker form, now is the time to learn it, embrace it and begin using it. Done properly with the conviction of your worth, you should be able to sell it. Sure, some buyers will balk and bolt, yet that is win for you. Let them go waste another broker’s time.

As more of us start using the form, there will be far less chance for a buyer to say “no other agent has asked me to sign it…”.

This is a slow yet sudden movement that will change the way we do business. NAR just imposed a $45 assessment fee on their dues, to start building a war chest to pay any settlements, which are all under appeal. But NAR and probably no brokerage has $1.6 Billion in their checking account to pay a judgement or settlement. We are all in this together.

Stay tuned...

With recent happenings regarding several suits against NAR, two previous suits recently settled and then the jury verdict against NAR, HomeServices of America, and Keller Williams Realty, it is becoming clear that drastic headwinds will be pushing the industry in a different direction.

The two settled suits which involved a few larger and national brokerages, that also included NAR, making the claim that the defendants conspired to keep their fees higher and limited choices for the clients.

First, Anywhere Real Estate, formerly known as Realogy Holdings Corp., settled for $83.5 million in a case filed by plaintiffs regarding real estate commissions along with the allegation of price fixing. That suit also included NAR, yet NAR did not settle their side of the suit, as Anywhere did.

Soon thereafter, REMAX (as one of the defendants) settled and agreed to pay $55 million to resolve all claims against the company and offered several business practice concessions as part of the settlement. One of the concessions was to stop requiring that licensees and brokers obtain membership in NAR. That alone will have far-reaching implications.

In the case that went to trial, The National Association of REALTORS® and two co-defendants were found liable Tuesday November 7, 2023, in which the plaintiffs challenged MLS rules and the real estate compensation model. The eight-person jury also found liable, HomeServices of America and Keller Williams Realty, which were named in the lawsuit. The jury award of $1.7 BILLION is under appeal by the defendants.

And, once these flood gates opened, others are now playing follow the leader. A suit against NAR in South Carolina is arguing that the defendants artificially inflated home prices while not being transparent on who pays the commission.

OK, on the street today, what does this mean? Clearly, many of these verdicts will be appealed, which will drag on for years. But the common thread is the commission structure between the listing agent offering compensation to a buyer’s agent, and how the buyer agent explains to the buyer (if at all) how that structure works.

The Arizona Realtors Buyer Broker Exclusive Employment Agreement is largely ignored in Arizona, as brokers and agents are concerned that most buyers would not sign it, thus costing them business. Another concern of brokers is that their agents are not trained on how to “sell” the Buyer Broker agreement to buyers.

That being said, we could rapidly see the offer of co-broke compensation disappear. Some listing agents are already offering $25 or less. The initial reaction might be that the listing agent is doing a dis-service to the seller, as many agents will sadly ignore that listing (at their peril) even though it might be the best property for their buyer. So, the commission gets in the way of the buyer getting the best property at the best price.

If, however, the buyer signed a Buyer Broker Agreement with their agent, the buyer would be obligated to pay that agent a commission based on the commission noted in the Agreement. In many parts of the country buyers understand the concept, realizing they might be able to get a property at a lower price, due to the fact the seller now only has to pay the listing agent, with no co-broke. That saves the seller money, which could be built into the pricing of the property.

The time has come for Arizona brokers and agents to embrace the Buyer Broker Agreement, as the ability to get paid might hang in the balance. And realize that the Buyer/Broker Agreement is just like a listing agreement, the ER, Exclusive Right to Sell. Both are bi-lateral employment contracts, and they function the same way. Sadly, while every broker requires an Exclusive Listing agreement in order to work with a seller, they have rejected and often fear the Exclusive Buyer Agreement, for many reasons.

We have begun to offer classes on the Buyer Broker Agreement, since in the near future, that might be the only way a buyer’s agent gets paid.

Last point, stay tuned and pay attention. Listen to your broker. Access the local, state, and national Realtor websites. Follow the real estate news services, such as Inman News and others. Be prepared. While we might have significant lead time before anything becomes either mandatory or a standard of care, there is no value in waiting to the last minute. Learn the Buyer/Broker Agreement.

As the industry changes, now on almost a daily basis, so have the processes that brokers and agents follow. With all the social media, and websites that provide owners with quick pricing, and where the owner can review their property as well as others. Any owner, at any time, might be curious as to the value of their property, as well as pricing on surrounding properties. And that often occurs while the property is listed with an agent.

Yet that is causing a new trend that hurts a listing agent, and often the seller.

Case in point. A listing agent has a listing for $765,000. That listing started 7 weeks ago and has 4+ months to run.

While listed, the seller, again, just curious, goes online to any of the websites that provide pricing, and they see that their house might be worth a few dollars more than the current listing shows. After a minute or two, the seller remembers the conversation with the listing agent, who clearly told the seller that pricing should be flexible and should be adjusted when the market dictates that.

Then, within a few days, the seller receives a communication from an agent regarding their property. Turns out, when the seller priced their home on the website, that was turned into a lead that the website sells to agents. So far, there is nothing wrong here.

However, before that agent reached out to the seller, did they follow the REALTORs Code of Ethics, Article 16, Standard of Practice 16-9? That SOP says the following:

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. (Amended 1/04)

Thus, if that agent contacts the seller based on the referral from the website, they are still obligated to 16-9, and failing that, they would be in violation.

Then, it goes further. That agent sweet-talks the seller and convinces the seller to cancel their listing and list with them. The listing agent receives a communication from the seller that they are cancelling the listing, which usually totally surprises the listing agent.

What’s next? Some FAQ’s

The seller may not unilaterally cancel a listing agreement. The listing agreement is an employment agreement, which binds both parties, the seller, and the broker. Thus, any cancelation of that agreement must be bilaterally agreed between the parties, meaning the broker could demand compensation in exchange for cancelling the listing. That of course depends on if the listing agent wrote any language into the listing agreement allowing a one-party cancellation, meaning the seller may cancel at any time, or with X days’ notice.

This is a business decision, and sadly, many brokers and the agents do not want to fight with the seller and burn a bridge. That agent deserves to get paid, yet that too, is a business decision.

The new listing agent would clearly be in violation of SOP 16-9, unless the agent visited the property and talked to the seller only after the seller specifically reached out and asked the agent to come over and talk to them. In this case, the seller innocently input their address for pricing on a 3rd party website and did not specifically ask that specific agent and/or brokerage to contact them.

With the broker’s approval, the current listing agent could file an ethics claim against the new agent, for failing to honor the current listing on the property.

The Code of Ethics also tells us not to solicit another broker’s listing, found in Article 16, SOP 16-4, which states:

REALTORS® shall not solicit a listing which is currently listed exclusively with another broker. However, if the listing broker, when asked by the REALTOR®, refuses to disclose the expiration date and nature of such listing, i.e., an exclusive right to sell, an exclusive agency, open listing, or other form of contractual agreement between the listing broker and the client, the REALTOR® may contact the owner to secure such information and may discuss the terms upon which the REALTOR® might take a future listing or, alternatively, may take a listing to become effective upon expiration of any existing exclusive listing.

One way to avoid going to war is the current broker reach out to the new wannabe broker, and have that agent back off, tell the seller that they are better off staying with their current agent, and wait for the listing expire. If the broker digs in their heels and does not agree, then the current agent and broker should file the ethics complaint on both SOP 16-4 and 16-9.

Last thought. Business is tough enough. Let’s all work and play by the same rules and treat each other with respect. And remember, ignorance of the rules and codes is not a good defense.