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REAL ETHICS by Steve Stazel | May 2010 | Index of all Real Ethics columns
Taking overpriced listings
Here is the situation: You give a CMA to a seller that shows the house is worth $200,000. The owner says, “My house is worth at least $250,000.” (The owner thinks his pink tile and burnt orange shag carpeting increase the value of the property.)
Let’s say you have a brain cramp and take the listing at $250,000. Before reading any further, please answer this question: what would you do differently at $250,000 that you wouldn’t do at $200,000? Answer now.
In six months, the listing expires still listed at $250,000. The seller gets a CMA from another broker stating that the value of the house is $200,000. The owner tells the second broker, “Let’s get the house on the market. I NEED TO GET IT SOLD.” The second broker asks the seller, “Why have you had your house listed so high for the last six months?” The owner thinks for a short time (you may not believe this, but sellers sometimes do not have good memories) and then says, “The first broker told me it was worth $250,000.” The second broker gives the seller a copy of the Code of Ethics and says “You might want to look through this.”
The seller reads Standard of Practice 1-3 which states that “REALTORS® shall not deliberately mislead the owner as to market value.” He is so frustrated and angry because the house hasn’t sold that he files an Ethics complaint against you for misleading him as to market value. At the Ethics hearing he will state that YOU chose the price. You will show your market analysis. The seller will state that he has never seen your market analysis. It is your word against his.
What you should have answered to the question above is that you would have had the owner sign your market analysis or in some other way acknowledge (in writing) that the listing price was the seller’s price and not yours.
If you are ever going to take a significantly over-priced listing, you should get the owner’s signature acknow-ledging that the seller set the price.
Each month, the Aurora Outlook features RealEthics, a column by Steve Stazel devoted to explaining Code of Ethics issues for members. The comments stated in this article are those of the author and do not necessarily represent the views of the National Association of REALTORS®, the Colorado Association of REALTORS® or the Aurora Association of REALTORS®. Ultimately, a hearing panel of the Professional Standards Committee determines whether a violation of the Code of Ethics has occurred on a case-by-case basis. These comments should not serve as the foundation of any ethics complaint, arbitration request or response.
If you have an ethical concern or an issue you would like
to see addressed, please call Stazel at (303) 773-3333 or e-mail him at
stazels@msn.com. The comments of this article reflect the understanding and
opinions of the author and do not represent an official expression of policy by the National Association
of REALTORSŪ.
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