Ethics and communicating with realtor-friends

Every realtor I know has friends who’ve chosen to go with other realtors when the time came to sell their house. It’s always a little disappointing to hear that kind of news, but it’s absolutely the choice of sellers to pick who they want to represent them. A lot of money is at stake and there are all kinds of reasons why they might want to work with someone that isn’t their friend.

Some people don’t think their realtor-pals have enough experience; others prefer to deal with someone more objective; some want their privacy; still others are afraid that if issues arise, it could impact the friendship.

So we  accept it; it’s part of the business.

What our friends may not understand, however, is that once they’ve made that choice, we are barred by  legislation from talking to them about anything that might be construed as relating to the sale or purchase of their property. To do so, we would have to have the written consent of their realtor.

And the legislation goes even further: not only can we not talk to them, we can’t do anything that might be construed as interfering with their contractual relations with their realtor.

The relevant sections are found in a regulation enacted under the Real Estate and Business Brokers Act, also known as REBBA 2002.Regulation 580/05 sets out the Code of Ethics that binds Ontario realtors. On this matter, it states as follows (and for “registrant,” substitute “realtor”):

7.  (1)  A registrant who knows or ought to know that a person is a client of another registrant shall communicate information to the person for the purpose of a trade in real estate only through the other registrant, unless the other registrant has consented in writing.  O. Reg. 580/05, s. 7 (1).

(2)  If a broker or salesperson knows or ought to know that a buyer or seller is a party to an agreement in connection with a trade in real estate with a brokerage other than the brokerage that employs the broker or salesperson, the broker or salesperson shall not induce the buyer or seller to break the agreement.  O. Reg. 580/05, s. 7 (2).

While you might think this means simply not talking about the transaction, it actually has a much wider interpretation. What is involved in “inducing” the buyer or seller to break their agreement? Most realtors think that means a realtor shouldn’t correspond with another realtor’s client at all; after all, almost any contact could result in someone deciding they like that realtor better than the one they’re already using.

In my office, we tend to take a very cautious approach to anything that might be construed as “crossing the sign.” I remember when a relatively new agent asked a group of realtors in the bull-pen  if she could send a card to a prospective client who had chosen to go with someone else, and wish him the best. The consensus of the experienced realtors was not to do it. They warned that even that small act could result in a complaint by the realtor and disciplinary action.

If  you have a realtor-pal and you don’t want to use their services, there’s no reason to feel guilty about it. But don’t blame them  when they drop off the radar for a while: it’s not personal; it’s ethical.

And speaking of ethics, it might be a good idea to at least give them a head’s up. There’s nothing worse than being a realtor and finding out that a friend has gone with another realtor when their listing pops up on MLX, or worse, on Facebook.

I had long-term good friends who handled this in a very classy way. I was a new agent when they decided to sell their house, and they chose to go with a realtor  they’d already worked with. They emailed me to tell me that this was what they were doing, and why, and  that it wasn’t personal. Was I disappointed? Of course. But I appreciated their thoughtfulness in letting me know beforehand and was able to wish them the very best of luck without any hard feelings.

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