Home Buying in Santa Monica>Question Details

Stephenj, Home Buyer in Crestline, CA

Is it unethical for a real estate agent/broker to steal a prospective purchaser away from another agent. The

Asked by Stephenj, Crestline, CA Wed Jul 22, 2009

initial agent spent considerable time showing properties and then a second agent "swooped in" and created the buy/sell agreement for a house the initial agent had shown the purchaser the house in the first place. Additionally, the second agent induced purchaser stating that "it would be cheaper to do business with me". Isn't this unethical. Perhaps even illegal. The buy/sell was created with no indications of the savings to the purchaser.

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Extremely unethical.

Buyer can decide whom they want to work with and change their minds. I've had Buyers working with me decide to work with another agent and vice versa. Fwiw, I always ask the latter to please inform the other agent that they've decided to work with someone else...I want my Buyers to be ethical as well.

But it is unethical for an agent to induce a Buyer to use them to write an offer instead of using the agent they've been working with. That agent should be reported to the Department of Real Estate and to whichever Board of Realtors they belong to.

I think that if I were a listing agent and a Buyer who had seen the property wanted to write the offer through me, there would have to be some pretty extenuating circumstances to make it happen, along the lines of gross incompetence or lack of ethics of the previous agent, and even then the first call would be to my own manager, to be followed by communication with the other agent's manager. In all likelihood, I would wind up cutting a referral fee to the other agent...and that's a worst case hypothetical scenario.
1 vote Thank Flag Link Wed Jul 22, 2009
You have to keep in mind that the ethics issue is predicated on the fact that the agent subscribes to the NAR Code of Ethics. Many agents are not NAR members. NAR Code of Ethics (Article 16) indicates it is unethical to solicit a buyer who has signed an exclusive agency agreement w/ another "Realtor". Link provided below. Neither DRE nor any other governmental body has an official stance on this issue. Therefore, it is not illegal (i.e. criminal) by any means. However, if an exclusive buyer's agency agreement was executed, agent who is a party to the agreement is entitled to his/her compensation as stipulated in agreement regardless of who closes the deal. This means that the home buyer may have to come out of pocket to pay a commission.
0 votes Thank Flag Link Sun Nov 15, 2009
There are different kinds of agency and this was an implied agency. If the first agent was doing their job and was following up with the client then they could claim procuring cause on the transaction and be entitled to the commission. They would need to do this after the closing as you can not do anything to get in the way of a transaction closing. Unless they can prove a break in the relationship between them and the buyer, they might have a case. Of course if the buyer approached the other agent to handle the transaction, then that is another story as a buyer can choose to work with whoever they want. This agent gives us other agents a bad name as the only the client should come first where in this case they were thinking about themselves. Shame on them.
0 votes Thank Flag Link Wed Jul 22, 2009
Hi Stephenj,

Yes, this would most certainly be considered unethical. Whenever I am speaking to anyone who may be a prospective client, asks me to help them view a propert, etc., I ALWAYS ask them if they are working with another agent, and if so, I tell them that they really should be going through their agent in their property search..

John Barry
Coldwell Banker Residential Brokerage
Sherman Oaks, CA
Cell: 323-810-7976
Email: john.barry@coldwellbanker.com
facebook: http://www.facebook.com/RealtorJB
Twitter: http://twitter.com/RealtorJB
0 votes Thank Flag Link Wed Jul 22, 2009
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