Brokerage

Nipping ethics violations in the bud

How agents respond to these situations speaks volumes about their character

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For high-integrity, hard-working, ethical real estate agents, there’s nothing more frustrating than working with agents who are incompetent, dishonest or just downright lazy.

Very early in my real estate career, I discovered that if the deal were going to close, chances were high that I would end up doing most of the work. When I did have a transaction with a highly competent, ethical, caring agent, it was an absolute pleasure. Sadly, those deals were few and far between.

While there will always be lazy and incompetent agents, where do you draw the line about what you’re willing to report when someone breaches the Realtor code of ethics or, worse yet, breaks the law?

Stupid, lazy or unethical?

Today I have seen a number of circumstances that raised the issue of ethical conduct. What would you have done in each of these situations?

1. You are taking a buyer to look at one of your listings and you discover that there are two buyers looking at the property without an agent. You asked how they were able to get into the property. Their answer is, “Our agent gave us the lockbox code.”

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2. It’s the day before closing and you drop by your vacant REO listing to pick up your For Sale sign. When you arrive at the property, the new buyers are busily ripping out the cabinets and the carpets. When you ask how they got in, they explain that their broker left the sliding glass door in the back open for them.

The issue is, will you take action when you see someone violate the Realtor code of ethics or the law, or when you are called upon to be the compassionate person who can literally save someone's life?

3. You have been in a tough transaction with a lot of bickering going on between the parties. When you finally get the last disclosure statement you need to close the deal, you notice that the buyer’s signature is different from how it appears on the other documents. In fact, the signature looks like it’s in the other agent’s handwriting.

4. You’re holding an open house for a highly volatile partner who has even more volatile clients. A homeless person shows up at the front door and it’s obvious the person is near death. If you cancel the open house, the seller will probably fire you both from the listing.

Deciding factors

In each of the above scenarios, ignoring the situation may seem to be the easiest course of action. If you don’t report the issue, however, then you are part of the problem instead of being part of the solution.

In the case where the agent gave the buyers the lockbox codes, immediately advise the buyers that their agent was not authorized to allow any non-MLS member to use the lockbox. If the buyers have the actual key, ask for it back so that you can return it to the agent’s manager. In terms of reporting the incident, it would be wise to notify both the agent’s manager and your manager as well. You can let them decide how to handle the situation or you can report the incident to your local board of Realtors.

In the second scenario where the buyers are ripping out cabinets and carpets, what happens if one of the neighbors reports the incident to the police? One outcome is that the buyers could be arrested for trespassing and vandalism.

Alternatively, what happens if one of the buyers is hurt? The probability is high that the brokers and the buyers could be sued. Moreover, the buyers could even be arrested. Again, the buyers should be advised to immediately leave the property because they could be charged with breaking and entering. The brokers and the bank should also be advised of the situation.

In the third scenario, the best course of action is to contact the agent. Tell them what you observed and ask them to contact their buyers to get an original signature. If the agent tells you that their clients are traveling and told her to sign it for them, insist on getting a legal signature. You can do this digitally if the clients have any type of mobile device. If the agent refuses, ask your manager to take up the situation with the agent’s supervising broker.

In the last scenario, the agent decided to cancel the open house to see that the homeless person received medical treatment. Her partner’s response to this situation was, “Why did you bother? He will just die anyway.” To her credit, the agent not only took the homeless person to the hospital, she also terminated her partnership with the other agent.

Everyone has varying degrees of integrity. The issue is, will you take action when you see someone violate the Realtor code of ethics or the law, or when you are called upon to be the compassionate person who can literally save someone’s life?

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.