realtor code of ethics
The Code of Ethics in real estate practice is governed by the National Association of Realtors. We are members as Realtors. The articles contained within the code are so important. It always surprises me how these are not practiced by some real estate practitioners. Having a California Broker’s License does not mean that every licensed individual is always working within the parameters of honest and fair dealings.
To file a complaint requires time and effort. By the time the offender has closed escrow with you, often it is just so much paperwork many agents will not file. For the most part, the Sacramento Association of Realtors Grievance Committee and Pro Standards Committees are not kept very busy considering how many members we have. The horror stories I have heard over the 25 years in my practice makes me shake my head in frustration.
A seller just had his escrow cancel due to dangers of home buying sight unseen. All because the buyer’s agent had not disclosed to the seller the fact that both of the decision makers had not viewed the home prior to submitting the offer. Which tends to happen when there are unscrupulous or ignorant agents (hard to say which description applies) who believe it is OK to deceive the seller and the listing agent.
Deceiving a seller is unethical and could be considered against the law due to possible breach of contract elements.
While I hung out in Hawaii last week, Ken Harney from the Washington Post contacted me about Realtor ethics violations and the new policy changes at NAR effective this January. The new policies now allow for publication of Realtor ethics violations, meeting certain criteria. Supposedly, this is so agents can find out which other agents have been found guilty of violating the Realtor Code of Ethics. However, the information is not available to the public.
Well, I’ve got news for ya. Most Realtors already know who the perpetrators are.
Ken Harney had made a comment that alluded to the notion paid subscribers of certain websites could monitor or change their online reviews. Which is not really true. I know for certain that many popular websites publish anything any member of that websites cares to write. Especially when the person writing the nastygram is not a client of the agent, makes up some crap, and you can’t get rid of it. Take Zillow for example. A poster of a review needs to satisfy only two conditions: to NOT be a real estate professional and to establish an account on Zillow. Then the reviewer can write anything that pops into her head, sort of like Trump, and the victim can’t take it down.
Harney says you can look at reviews or no reviews on Realtor.com; however, I don’t ask clients to post a review there. Because it’s not as widely read as Yelp or Zillow. You can’t ask clients to post their reviews everywhere for you online. Realtor.com is on the bottom of many agent’s lists. Further, I understand that an agent can remove bad reviews from Realtor.com by not approving them, but I haven’t verified this. However, you can find my client’s testimonials at Sacramentorealtorreviews.com.
As for Realtor ethics violations being available to the public, I replied via email to Ken Harney’s request: The public viewing of dirty laundry is never gonna happen. I see the Washington Post changed my comment to “not going to happen.” But another newspaper did not. I think it lessens the impact to change what I said. It’s not meant to be assertive or in favor or against, just a fact.
Very clearly Realtors attempt to police themselves and, as such, sometimes they are wrong and sometimes they are right. A person was once pursued for an ethics violation when she excitedly wrote online that her business had exploded like 1,000 percent, it was so crazy. Do you think people are serious when they say something like that? Who do you think turns in so-called ethics violations of false advertising like this? Jealous agents, that’s who. These are NOT agents concerned about raising the bar.
Agents concerned about raising the bar are out there setting good examples.
On top of this, many years ago I got hauled into a ethics hearing that was so bogus, so contrived, so over-the-top idiotic, yet the abuse upon full disclosure failed to cease. Not even when an association lawyer who is now in management at the Board tried to stop it. The ethics committee jumped all over that claim and forced me to show up for a hearing that I should never have been called in for. Required to show my 1099 from the New York Times to prove I was also a paid freelancer. Brought my laptop to the hearing so I could visually explain how the internet works. They had no claim. Of course, I was found innocent.
But what a mess that should never have happened. That experience erased any feelings of good will toward the procedures. Such a dog-and-pony show. It most likely happened because some green-eyed agent noticed my content ranks high in Google for real estate-related material online. This individual evidently searched hard for something to report for a Realtor ethics violation because nobody goes to that extent on impulse. The person decided, in error, that the website, owned by the New York Times, had failed to disclose my Realtor status online. Which was untrue. Flat-out wrong.
Why aren’t they out there busting the agents who lie to your face? Doctor documents over a client’s signature? Insist there is no variable commission when there is? Tell buyers if they write an offer with the listing agent, they will make sure they get the property so they should drop their buyer’s agent? Submit earnest money deposits on transactions that are already deposited in another escrow? Independently make decisions for their clients? Squeeze buyer’s agents out of a listing on purpose? Tell a buyer a listing with a release clause is sold?
Those are a hideous bunch of infractors.
As long as Realtor Associations are in charge of ethics violations, there will always be drama. It’s like incest in some ways. And they will never publish that information to the public. They aren’t even that sure of it themselves.
There are some people in this industry, like me, who really feel the pain when presented with the unethical behavior of Sacramento Realtors. Not every Sacramento Realtor, of course, is unethical. Far from it. In fact, it is a small handful of agents who are loose with their ethics. But the disturbing aspect is they know they can get away with it. There is nobody to stop them. Not the Sacramento Board of Realtors, not the Ethics Committee and most certainly not the Realtor Code of Ethics. Even brokers seems reluctant to confront the behavior.
Although I have been toying with the thought of approaching the DRE. I simply feel like when we hear about the rare incidences of unethical behavior of Sacramento Realtors that we owe a duty to the industry to say something. Otherwise, we become part of the problem.
It starts when a buyer calls to reiterate a conversation held with the allegedly unethical listing agent. The agent promises the buyer offer acceptance, but only if the listing agent double-ends the sale. Even though the agent has multiple offers from other agents as well. But lo and behold, all of a sudden the dual agency offer gets accepted. No surprise there.
First, this unethical behavior of Sacramento Realtors drives a wedge between consumers and exclusive buyer’s agents. Agents are not supposed to swipe another agent’s client. Second, it deprives the seller of the right to counter all of the buyers. Possible dishonest dealings with the selling agents. Third, it appears to openly violate the listing agent’s fiduciary to the seller. Is it possible the seller could have made a higher profit if bidding from all buyers had been allowed?
The thing is an outside party can’t prove it. The buyers probably don’t want to get wrapped up in an ethics case and will most likely vehemently deny the conversation even took place. All they want is the house, and they don’t care how they obtain it.
In this particular situation — of which I am not a party, btw, this is third-hand information relayed to me — it gets worse. The agent whose buyer got snatched through the unethical behavior of Sacramento Realtors was at a sewer inspection. As this coincidinky goes, the agent overhead a conversation from the sewer inspection guys talking about the unethical behavior of Sacramento Realtors. Sewer guys admitted an agent asked them to falsify a sewer report. Who was it? The very same agent who purportedly broke fiduciary.
It’s pretty bad when even the sewer inspection guys call that agent unethical. How low can an agent go? And what can be done about it? It makes a person lose faith in her profession when this kind of crap is allowed to continue without consequences. It takes years to build a solid reputation in Sacramento real estate and only seconds to ruin it. Perhaps we can hang our hopes on what comes around, goes around. Bound to be karma.
Agents don’t openly talk about this sort of stuff in real estate because they don’t want to be tainted by it. Further, the public has enough problems with trusting agents as it is. But please know it is rare that this happens. It is definitely not the norm for Sacramento real estate. Not something agents with the Elizabeth Weintraub Team would ever do.
Raising the bar does not mean calling the real estate police. For one thing, there are no official real estate police. One also can’t just notify the California Bureau of Real Estate of a violation and expect the staff who handle consumer complaints to know which rules or regulations had been violated. The staff is made up of people who just work there, they have a 9-to-5 job, and that job is not to monitor or memorize every real estate regulation on the books.
If one is gonna file a complaint at the California Bureau of Real Estate, one needs to do one’s own homework and point out the codes or regulations the perpetrator has trampled. Otherwise, one most likely will encounter some yo-yo saying that seems OK to me, when the actionable item is against the law. Perhaps the violation could be grounds for losing a real estate license, but then we agents are not the commissioner running that arm of state government. Tip: don’t just say an agent can’t do XYZ without citing case or code numbers.
Raising the bar is what every real estate agent has a duty to do, but few get involved. They’re too busy with clients, family, friends, themselves. Yet, how much effort is it to educate the violator? Sacramento Realtors should speak up. When you see something, say something to the agent. Care enough to educate. I’m not suggesting punishment nor do I advocate filing a complaint with the Sacramento Board of Realtors, unless it’s the last resort. Just talk to the agent.
Sacramento Realtors are often unsupervised. Or, they are complacent: been doing it this way for X number of years, buddy, ain’t seeing no reason to change now, sort of attitude. They are not interested in raising the bar. Nobody died and appointed them Governor. But if we don’t speak up, it makes us part of the problem.
For example, an agent sent a text message to one of my sellers yesterday, thanking them for allowing a showing. He also rambled on, sharing personal specifics about his buyer and then asked the seller whether the seller would consider a particular type of negotiation. When I informed the agent he was violating Article 16 of the Realtor Code of Ethics, he denied it. He became defensive, explaining he was only trying to . . .
It was Labor Day. Nobody was really working in Sacramento real estate. Yet, I took the time to explain that the agent appeared to be interfering in my fiduciary relationship with the seller. He cannot negotiate with the seller directly. He cannot throw out ideas for consideration nor try to influence the seller’s opinion of the buyer. I wonder how long he’s been doing business this way?
I don’t want to make enemies out of other Realtors. Nobody does. I don’t wanna report real estate agents, that’s not my style. Just stop and think, people. Raising the bar will only make the real estate profession better. Speak up. Inspire greatness.