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Keys to professional success

By Debbi Conrad, Wisconsin REALTORS Association

REALTORS® work with clients and customers in real estate transactions. Some may see a transaction as an adversarial process, but the outcomes are best for everyone involved when real estate professionals work in the spirit of cooperation and courtesy rather than in combat mode. Licensees are best served when they perform their duties with civility, candor, diligence, respect, courtesy, cooperation and competence. 

Courteous competitors

Even though real estate professionals are competitors, they can work together courteously and cooperatively to provide clients, customers and the general public with high-level and trustworthy real estate service. The courtesies real estate professionals extend to each other are an important element of this cooperation. Simple courtesy improves efficiency and communications. Lack of courtesy can negatively affect clients and their impression of the real estate profession. 

Communication is key

Communication is a crucial aspect of professionalism. Optimal communication with clients and customers means knowing their preferred method of communication and the times they are readily available. Licensees should take the time to periodically report in and catch the party up on what happened that week. Agents need to look for ways to build trust by staying on top of communication, being prepared and sharing all options with the parties. The good and the bad need to be shared. Playing ostrich with unfavorable news can diminish goodwill, undermine trust and lead to resentments that could implode the transaction.

Another critical piece is communication and cooperation with other agents in the transaction. Agents should always respond to others’ calls and emails promptly and politely. But all too often they do not. This is a serious failing because real estate professionals rely on communicating and cooperating with other competitors for their livelihood.

John Giffen recently wrote an Inman News article entitled, “Amateur hour! How to keep your cool with other agents: To keep transactions moving, the best move is to communicate, communicate, communicate,” available at www.inman.com/2019/08/18/amateur-hour-how-to-keep-your-cool-with-other-agents. He offered some wonderful advice regarding what to do if the agent on the other side of the transaction is unresponsive: 

When I can’t get in touch with the cooperating agent, I use the following script. I also shared it with my agents so that they can use it with the cooperating principal broker when they can’t reach the other agent:

“Mr. (or Ms.) Broker, I’ve been trying to reach Betty Agent to present an offer we have on her listing at 123 Elm Street. I was wondering how to proceed. I’ve tried reaching Betty on her cell via voice mail and text, as well as leaving multiple messages at her office. I’m wondering if she is O.K. My buyers are eager to have their offer presented. What do you recommend?”

I’ve had great results with this approach. It is non-threatening and will make the other broker track the agent down.

Good communication may also mean following up with the other agents to make sure that they are attending to the issues facing their party. But that does not mean demeaning them, bossing them around or peppering them with countless messages. Be firm and polite and show professional respect for your peers. 

Article 15: Please do not demean your competitors

Article 15 of the REALTOR® Code of Ethics states: “REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” Unfortunately, the opposite is sometimes true. Some agents may tend to speak badly of another agent and point fingers when something goes wrong, or act in a way that adversely affects the parties and the outcome of the transaction, not to mention the reputation of real estate licensees.

A story illustrating an Article 15 violation may be found in Case #15-2: Intentional Misrepresentation of a Competitor’s Business Practices. The following is a summary.

Following a round of golf one morning, a homeowner was chatting with Broker B and remarked that his family had outgrown their home and he wanted to list it for sale with Broker B. Unfortunately, it turns out Broker B works only with buyers. The homeowner then asked about Broker C, to which Broker B replied, “I don’t know if I would do that, while he does represent sellers, he doesn’t cooperate with other brokers and, as a result, sellers don’t get strong offers for their properties.”

Later that day, the homeowner told his wife what Broker B had said and she told Broker C’s wife who was her close friend. Needless to say, Broker C found out about this and he filed a complaint against Broker B for making false and misleading statements. At the ensuing ethics hearing, he denied the allegations and said he always cooperated. Broker B replied, “That’s not so. Last year you had a listing in the MLS, and I spent months working with the buyers who submitted a purchase offer. You didn’t pay me the offer of compensation, though; you paid another broker who stole my clients from me at the last minute, and all he did was submit the purchase offer.”

Broker C indicated he had made a blanket offer of compensation in the MLS, and his refusal to pay Broker B was because there was a procuring cause dispute at the end of the transaction. Upon questioning by panel members, Broker B admitted he had no personal knowledge of any instance in which Broker C refused to cooperate with any other broker but assumed his failure to pay Broker B’s compensation in the one transaction was likely how Broker C treated other brokers.

The Hearing Panel noted that cooperation and compensation are not the same thing. They found Broker B’s characterization of Broker C’s refusal to pay because of a procuring cause commission dispute as a refusal to cooperate and resulting assumption that Broker C did not cooperate with other brokers was false, misleading, and not based on factual information. Consequently, Broker B was found in violation of Article 15.

Read the interpretation of this case at www.nar.realtor/code-of-ethics-and-arbitration-manual/case-interpretations-related-to-article-15.

Making assumptions and repeating misinformation about real estate professionals to consumers is clearly not the kind of communication licenses should aspire to. 

Another time communication, cooperation and courtesy play a role is when it comes to the negotiation of commission, when the timing and the method of communication are particularly important.

Article 16: Negotiate Commission with the Broker Not in the Offer

Article 16 of the REALTOR® Code of Ethics states: “REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients. (Amended 1/04)”

Standard of Practice 16-16 provides, “REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation. (Amended 1/04)” Changes to compensation get messy and sometimes end up in local association arbitration hearings. Modifications to compensation should be settled before submitting an offer to purchase.

A story illustrating an Article 16 violation may be found in Case #16-15: Cooperating Broker’s Compensation Specified on Deposit Receipt. The following is a summary.

The listing and cooperating brokers were both MLS Participants and the listing broker specified the compensation he was offering on listings filed with the MLS. However, the cooperating broker had ignored this information and had, on two separate occasions, submitted purchase agreements with copies of deposit receipts that specified more compensation than what had been offered in the MLS. In other words, he was demanding cooperating broker compensation greater than that offer by the listing broker in the MLS. In addition, the language of the deposit receipt served to make presentation of the offer conditioned upon the listing broker’s agreement to pay a larger commission than offered in the MLS. This created a dilemma for the listing broker to either not submit the offer to the client, which would violate Wisconsin license law, or, alternatively, pay a larger co-broke commission.

The cooperating broker insisted he had a right to negotiate and the amount he had put on the deposit receipt was the compensation for which he was willing to work. The Hearing Panel agreed the cooperating broker was entitled to negotiate concerning compensation but that such negotiation should be completed prior to the showing. The panel’s decision further advised it was improper to insert the amount of cooperating broker compensation into the purchase contract between the buyer and seller, as the brokers are not the parties to the buyer-seller contract. Compensation between the cooperating broker and the listing broker is properly a matter of contract between the listing and cooperating brokers and preconditioning an offer to purchase on the listing broker’s acceptance of an increased co-broke commission was inappropriate and in violation of Article 16.

Read the interpretation of this case at www.nar.realtor/code-of-ethics-and-arbitration-manual/case-interpretations-related-to-article-16.  

Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.

Professionalism Resources

WRA Thursday Takeaways episode 5, “Professionalism,” with Tracy Rucka at www.wra.org/ThursdayTakeaways/Episode5.

WRA professional standards resource webpage at www.wra.org/ProfessionalStandards