In the decision of the hearing body, it was concluded that REALTOR® B did indeed have the right to negotiate with REALTOR® A regarding the compensation of the cooperating broker, but that these negotiations had to be concluded before the presentation of the property by REALTOR® B. The decision stated that REALTOR® B had the right to designate the properties listed by REALTOR® A on the terms offered by the listing broker in the MLS. Alternatively, it may require payment at a later date when the property is sold, put back on the market, exchanged, optioned, refinanced (if the broker has been tasked with arranging new financing) or leased to third parties within a certain period of time (e.g.B. one year) after the date of the agreement. A compromise could be to pay a partial fee with the amount due if the property is sold during the cancellation period. REALTOR® A also complained that the language of the deposit receipt was formulated in such a way that the submission of the offer was subject to REALTOR`s approval ® A to pay a higher cooperating brokerage commission than it had offered through MLS. REALTOR® A stated that this practice of REALTOR® B created a dilemma for him as a listing broker not to make the offer to the client or to pay a higher amount of cooperating broker remuneration than he had offered through MLS. The property remained unsold for the duration of REALTOR`s listing agreement® B. REALTOR® C again called Customer A and received assurances that he would sign an exclusive listing of the property after the listing contract expired.
REALTOR® A then filed a complaint against REALTOR® B, invoking section 16 of the Code of Ethics as interpreted by Standard of Practice 16-16. He explained that REALTOR® B interfered in REALTOR`s relationship® A with its seller-client by trying to negotiate a separate commission agreement with the seller. REALTOR® B replied that since the request to the seller to pay his commission had been made by realtor® B`s client, the buyer, directly from the seller and not from the listing broker, there had been no violation of the code of ethics. REALTOR® A confirmed that it was registered on REALTOR® B and then accused REALTOR® B of not respecting its status as exclusive representation to the client by requesting registration. The Board of Appeal referred the complaint to a hearing body of the Professional Standards Committee for hearing. After notifying the parties, a hearing on the complaint was convened, at which the real estate agents® A and B were present. REALTOR® A`s specific allegation was that REALTOR® B knew that the client had initially registered the property with him, REALTOR® A, because he had discussed the property with REALTOR® B during the term of the original listing contract; that the real estate agent® B had shown the property to the same person who had now purchased the property through the real estate agent® B during the period of registration of the real estate agent® A; and that, to that knowledge, the action of REALTOR® B to request inclusion even after the expiry of the list, constituted a violation of Article 16. In addition, the list of exclusive sales rights offers a greater incentive for brokers and their agents and imposes the obligation to work carefully and continuously to achieve the objectives of their client buyer. The hearing body agreed with REALTOR® A that he was the exclusive representative of the seller and that he had not represented the buyer and concluded that his conduct had not violated article 16 as interpreted by Standard of Practice 16 (13). At a duly noted ethics hearing convened after all of the association`s procedures had been followed, REALTOR® A filed its complaint that REALTOR® B had contacted the real estate agent`s client® A during the unexpired term of the client`s registration agreement with REALTOR® A and had therefore violated Article 16 of the Code of Ethics.
Agents of an exclusive listing receive commission for a property if they are sold within the exclusivity period, regardless of how the buyer is found. The panel`s conclusion was that the consent of the listing broker required by Article 16 cannot be presumed in the interpretation of Standard of Practice 16(13), but must be expressed; and that REALTOR® C violated Article 16 by negotiating directly with REALTOR® customer A without realtor`s consent® A. At the hearing, REALTOR® A called Seller Z as a witness. Seller Z faithfully recounted the content of REALTOR® B`s conversation with Seller Z and his wife, commenting that although REALTOR® B said he was simply trying to figure out why he had not received the listing, it seemed to Seller Z that REALTOR® B wanted Seller Z to cancel his listing at REALTOR® A. Then REALTOR® B testified in his own defense. He admitted that he knew that REALTOR® A had already registered the property exclusively when he contacted seller Z and requested a follow-up appointment. He defended his actions, stating that he had not tried to get Seller Z to cancel the offer, he was simply trying to understand what he had said – or had not said – which led Seller Z to register on REALTOR® A instead of him, and wanted Seller Z and his wife to be aware of the services, which it would provide if their registration expires at REALTOR® A. After a decades-long career as a well-known researcher and teacher, Professor Y decided to sell his home near the university campus to the Northwoods in anticipation of his retirement. After living in the house for over thirty years and realizing that the proceeds from the sale would make up a significant part of his pension funds, Professor Y agreed on several potential listing brokers, including REALTOR® P and REALTOR® Q. At each appointment, Professor Y asked many questions in the hope of getting a clear idea of the market value of his property and the marketing strategies offered by each broker. If an owner signed an exclusive listing contract with an agent and the owner also placed an ad for the property, the broker could still earn a commission even if the buyer responded to the listing.
The Hearing Panel noted that section 16, as interpreted by Standard of Practice 16-16 REALTOR® B, required REALTOR® B to determine whether REALTOR® A was willing to contribute to REALTOR`s commission, either directly or by reducing the commission as agreed in the registration agreement®, as agreed in the registration agreement, and, if so, the terms and amount of such contributions. The Hearing Committee decided that REALTOR® B had infringed Article 16. REALTOR® A has been registered with the MLS Association. In the ”Notes” section of the offer, it was pointed out that the seller had unlocked. Shortly after, REALTOR® A received a call from REALTOR® B asking for permission to show the property to a potential buyer. REALTOR® B was granted and ownership was shown to the interested party. During the demonstration, REALTOR® B started a conversation with Seller X about his plan to move to another state. REALTOR® B told the seller that he knew a number of real estate agents in the city where Seller X moved and suggested that he refer Seller X to one of these brokers. Seller X replied that REALTOR® A, the listing broker, had already mentioned the possibility of a recommendation and that Seller X felt obliged to be recommended by REALTOR® A if by someone. A buyer`s broker who finds properties listed by other brokers does not become a double agent or lose their status as the buyer`s exclusive representative by simply working with the sellers` brokers. The fees that a buyer`s broker receives are usually paid by the seller directly or through the seller`s broker and do not create a duplicate agency. Real estate agents tend to prefer exclusive offers to open offers, which only pay about half the usual commission rate.
Open listings put real estate agents in competition with each other to attract buyers, but with no guarantee that agents will earn a commission at all. .
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