DO NOT SACRFICE EHTICAL STANDARDS IN A HOT MARKET
(from a talk Vickie Naidorf gave at the Los Altos/MV tour meeting)
At last Friday’s Los
Altos/Mountain View District tour meeting, real estate attorney Vickie Naidorf,
who is legal counsel for Coldwell Banker and a member of the PRDS Standard
Forms Committee, told agents the good standards of real estate practice should
never be forgotten just because it is a hot market.
Naidorf announced that the Department of Real Estate (DRE) has stepped up its monitoring of brokers’ offices. Spot audits are being conducted and investigators are focusing on trust fund accounting and proper broker files, so brokers/managers need to be proactive and make sure they are ready. All files should be locked in cabinets and sales associates should not have access to files.
All offers need to be presented to the seller and agents need to provide proof of this in their files. At the bottom of the last page of the contract form is a box where sellers can initial to indicate they have been presented the offer. Keep a copy of the offers and proof the seller received them and rejected them, Naidorf told agents.
Agents are advised to have a serious documented conversation with sellers who have a preference on the type of offers they receive. “This ends the ethical quagmire and potential ethical disputes down the road,” said Naidorf.
Naidorf said there are buyers who are so desperate that they are going in with no contingencies, yet when their offer is accepted, they don’t perform. The seller needs to enforce the terms of the contract from day one with an official notice to perform, said Naidorf.
A seller cannot unilaterally cancel a bilateral contract with a buyer. Agents can have the seller have their real estate attorney write an opinion stating it is safe to proceed with the other buyer. Keep a copy to show that the seller is proceeding on the advice of his attorney – not the agent.
Naidorf reminded agents not to sacrifice ethics in a hot market. Agents must be careful of using certain terminology to get a buyer to act because it could be misconstrued that the agent is dominating the buyer and forcing the buyer to take action.
“You are all members of an organization that has in its core the ethical performance of its members. It is critical you represent this. Sacrificing your ethics will cost you,” said Naidorf. “Be ethical, do your job, sell property and keep your reputations intact, so when the next change in the market comes, you’ll still be in the market.”
Naidorf announced that the Department of Real Estate (DRE) has stepped up its monitoring of brokers’ offices. Spot audits are being conducted and investigators are focusing on trust fund accounting and proper broker files, so brokers/managers need to be proactive and make sure they are ready. All files should be locked in cabinets and sales associates should not have access to files.
All offers need to be presented to the seller and agents need to provide proof of this in their files. At the bottom of the last page of the contract form is a box where sellers can initial to indicate they have been presented the offer. Keep a copy of the offers and proof the seller received them and rejected them, Naidorf told agents.
Agents are advised to have a serious documented conversation with sellers who have a preference on the type of offers they receive. “This ends the ethical quagmire and potential ethical disputes down the road,” said Naidorf.
Naidorf said there are buyers who are so desperate that they are going in with no contingencies, yet when their offer is accepted, they don’t perform. The seller needs to enforce the terms of the contract from day one with an official notice to perform, said Naidorf.
A seller cannot unilaterally cancel a bilateral contract with a buyer. Agents can have the seller have their real estate attorney write an opinion stating it is safe to proceed with the other buyer. Keep a copy to show that the seller is proceeding on the advice of his attorney – not the agent.
Naidorf reminded agents not to sacrifice ethics in a hot market. Agents must be careful of using certain terminology to get a buyer to act because it could be misconstrued that the agent is dominating the buyer and forcing the buyer to take action.
“You are all members of an organization that has in its core the ethical performance of its members. It is critical you represent this. Sacrificing your ethics will cost you,” said Naidorf. “Be ethical, do your job, sell property and keep your reputations intact, so when the next change in the market comes, you’ll still be in the market.”
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