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Realtor® Answers to Realtor® Questions. My answers here are based on RELRA
in Pennsylvania and the REALTOR® Code of Ethics I am not giving legal
advice, nor do I intend to. Pennsylvania Realtors® are reminded that as members
you can call the legal hotline for free and get an attorney to answer your
questions. The Code of Ethics is subject to interpretation by
local Professional Standards Committees. With respect to questions which touch
on agent and broker relationships and company to company relationships, my
answers are based on typical market customs and typical MLS and Association of
REALTORS® bylaws, for REALTOR® owned MLS systems. This advice should not
be substituted for legal advice, and is based only on the information given to
me by the person asking the question. The guru has no responsibility for details
you leave out. The questions selected and used are of a general nature, and
the answers are based on the information given to me. Realtors® living in other
states are advised that questions concerning license law will not apply in their
states. Do NOT substitute any answers in this column for legal advise that is
specific to your situation.
Dear Guru:
I am a listing agent, and I had an offer on my listing when another offer came
in, from another agent. I told the agent I already had one offer in on it. He
asked me: "Well, how much is it?" I said I didn't think I should tell
him that and he said: "Oh, they passed a new law a couple of years ago--you
are not only allowed to tell, you have to tell." I still didn't tell him,
and he was annoyed. Did I do the right thing?
Answer: It sure sounds that way to me! Let's first review two things--license
law in Pennsylvania and the REALTOR® Code of Ethics, which is what I think your
(sadly mistaken) colleague was talking about. Under license law in Pennsylvania,
and every other state that I'm familiar with, agents derive the scope of
authority they have from their clients. In other words, the client is in charge.
An agent can only follow lawful instructions; and absent an instruction, they
have to ask their client: "What do you want me to do?" In this
case, since it is most probable from the way you ask the question, that
you did not have direction from your client, as in: "If anyone asks how
much another offer is, go ahead and tell them", you were correct to not
tell. Before revealing that information you would have to get your client's
permission.
Now,
let's talk about the Code of Ethics. Standard of Practice 1-15 reads:
• Standard
of Practice 1-15
Realtors®, in response to inquiries from buyers or cooperating
brokers shall, with the sellers’ approval, disclose the existence of offers on
the property. Where disclosure is authorized, Realtors® shall also disclose whether offers were obtained by the
listing licensee, another licensee in the listing firm, or by a cooperating
broker. (Adopted 1/03, Amended 1/06)
By the way, you can see by the date at the end, this was amended in January of
2006. But read it carefully. First of all it says: "with the sellers'
approval". You have no business revealing the existence of other
offers without the sellers' approval. If you used the PAR Standard Listing
Contract, your seller gave you permission to disclose the existence of other
offers, and which agent/company they were from. This is found in paragraph 19 of
the PAR form. However, nowhere in the Code of Ethics, or in the
PAR listing contract does the seller give you authority to disclose price, terms
and conditions of an offer. Your seller would have to instruct you to do so, and
this kind of instruction is very unlikely to be a 'blanket instruction' as in:
"Anytime another agent asks, go ahead and tell them the price, terms and
conditions of the other offer". Sometimes, a seller will give an
agent the lawful instruction to reveal this information. You can follow
this lawful instruction unless you are acting as a dual agent, in which
case revealing the information could be detrimental to your other client.
The way you asked the question, it appears you weren't a dual agent; both buyers
were represented by other agents. The first question you have to ask yourself is
whether or not disclosing this information is what your client wants--the follow
up question is whether or not it benefits your client. Obviously, getting this
information would have benefited this other agent and his client--you and your
client--not so much. Had you called your client to ask if you should reveal
the information, you would have wanted to point out the pros and cons to your
client of revealing this information. In the meantime, if you used the standard
PAR listing contract, it appears you satisfied both the law and the Code of
Ethics. More important, you didn't let another agent convince you to do
something wrong. Congratulations on standing firm!
Answers to previous questions, click here
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