AGENTS: I have a moral/ethical dilemma that I am not sure how to handle. Can u help?

Asked by Francesca Patrizio, Monmouth Cty NJ Tue Nov 27, 2007

A former seller has reslisted his properties with another realtor (happy about that). Problem is that I and he is aware of many, many disclosure issues that he continues to not disclose. THE SELLER IS A REALTOR, who rec'd is license for the sole purpose of collecting commissions; therefore, regardless of the fact that myself and his new realtor have advised him of disclosure laws, he just doesn't give a hoot! WHAT TO DO!

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Lorie Gould, Agent, Duluth, GA
Tue Nov 27, 2007
Francesca, I am a strong believer that until the Real Estate Commissions and the National Association of Realtors makes an effort to clean up our industry with tougher guidelines to become a real estate agent and tougher guidelines to remain a Realtor (like a minimum amount of transactions per year) then more and more agents like this will keep giving consumers a bad taste for Realtors.

If this seller is aware of defects and he fails to disclose then he is committing fraud. Even if a home is sold as-is the seller is still under obligation to disclose. And for the fact that this seller is an agent he is held to a higher standard than most sellers.

Why is he not listing his own house? Regardless, If he is a Realtor than he is a member of the National Association of Realtors and a local board; therefore, he has taken his ethics course and passed the test. Like that really means someone has ethics but it does mean that this person knows that they have a duty to disclose. If you know that this seller is blatantly misleading buyers then I would report him to the local board and to the real estate commission.

You could also contact their broker. If their broker is a broker of morals and ethics then he will investigate the situation to protect his company that this agent is representing. If he finds that this agent is intentionally not disclosing he could send his license back to the commission. This is a strong statement to commission.

There are going to be many agents that disagree with me; however, if will do not report agents that are conducting such behavior which hurts consumers then our industry will never be cleaned up!
4 votes
Mr.P, , Arizona
Tue Nov 27, 2007
I usually don`t answer technical questions, in a state which I am not licensed.

So I will make a, one time exception.

Now that you have made this dilemma ,a matter of public record.

You may be on the "hook" for a little more than before this post..

I would consult with my Broker, and make sure I was covered by my E&O Insurance. In regards to the current seller, and future buyers.

Just my 6% worth.
3 votes
Carrie Crowe…, Agent, Southaven, MS
Tue Nov 27, 2007
Well you seem to be faced with a tough decision. I believe you to be ethical and straight forward from some of your previous posts. I would let the seller know that you are aware of his ethical situation and that if he doesn't rectify by "x" date that you will report him to the broker who has is property listed, or the board, depending on how hard you want to be. (I would not want to be in your shoes.) I would prefer this over just reporting him because it gives him an opportunity to do the right thing, and if you reported him without talking to him first, he would likely know it was you anyway. This way it is out in the open and honest. We should all hold each other accountable to do the right thing!
3 votes
Francesca Pa…, , Monmouth Cty NJ
Sun Dec 2, 2007
Lorrie and Carrie both had "best answers" on this one, so I was torn who to give the award to! LOL . . . so I am choosing the person who responded first. Thanks girls! I do appreciate your feedback. It's good to know that I'm not the only that feels this is a problem.
2 votes
Carrie Crowe…, Agent, Southaven, MS
Mon Dec 3, 2007
Thanks for the kind words Francesca, I agree Lorrie had an excellent answer, and I gave her aTU.
0 votes
T.E. & Naima…, Agent, Dallas, TX
Tue Nov 27, 2007
I don't know about laws in NJ, but in Texas, the fiduciary duty doesn't end when the listing agreement expires. A homeowner can sue you for breaking that. If that is not the case in NJ, then I would report him to the real estate commission, they cannot clean up house if nobody brings these things to their attention. . If you bring a buyer, you have the moral obligation to share everything you know about the property. However, you have good advice below. I think you should talk to his broker, but he can always go to another brokerage that hires agents if they have a pulse only.

As Keith pointed below, the ethics issue lies with his current agent. I am sorry for your dilemna..
0 votes
Keith Sorem, Agent, Glendale, CA
Tue Nov 27, 2007
I thank you for being concerned. IMHO the truw ethics issue lies with the current listing agent. She is governed by the NAR Ethics guidelines regarding disclosure and the fiduciary duty to all parties. Also, she is governed by the associations MLS rules, depending upon what is disclosed. She should consult with the NJ Association of Realtors legal counsel.

So far as the seller goes, if the seller is a DRE Licensee, and a Realtor, the seller could certainly be in trouble on numerous counts. What I am unable to figure is why the seller, whom you said is licensed, would be allowed by their broker to sell their own property. In our office we are required to use another Realtor because our E & O insurance is not valid if we sell our own property.

Good luck.
0 votes
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