When a Realtor Violates the Code of Ethics, Clients Often Suffer. Here Are Examples.

Also, our newest solar-powered listings; propane proposed for energy backup; 3 passive house-certified homes built in Boston; and non-profit helps seniors find housemates instead of downsizing.

I often remind my readers that only members of the National Association of Realtors (NAR) can call themselves “Realtors,” and only Realtors are bound by the Realtor Code of Ethics. Violation of the Code can subject a Realtor to discipline and even termination of their NAR membership.

There are several ways that we Realtors might violate the Code without even realizing it, and since an ethics complaint can be filed not just by fellow Realtors but also by clients, let me share with you some of the practices that constitute violations. If your agent is not a Realtor — and only half of all licensed agents are Realtors — he or she isn’t bound by the Code but might still be violating state or federal laws as well as Colorado Real Estate Commission rules.

Ask yourself whether any of the following scenarios resemble something you may have experienced with an agent you hired.

Misleading a seller on the value of their home in order to get a listing is a violation of Article 1. The agent is obligated to advise the seller of the home’s true value utilizing his or her professional expertise, and to mention the pitfalls of overpricing it. This would also be considered a violation of the real estate commission’s rule required “competency.”

Not presenting all offers received prior to closing is another violation. A low-ball offer from a house flipper can be demoralizing, but you still have to present it unless you get in writing (as I once did) that you don’t have to present offers below a certain price. Even after a listing is under contract, the listing agent must present any offer that is received.

Divulging confidential information, especially if it disadvantages your client, also violates Article 1.  A buyer’s agent once told me that her buyer really loved my listing and their current home was about to close, so they really had to buy this home.  That disclosure disadvantaged the buyer in a big way, because an agent is expected to share with his/her client any confidential information received about the person of the other side of the transaction. Similarly, it would be a violation for me to say my seller will take less than the asking price — unless I am specifically authorized to say he is “motivated.” Buyers’ agents know what that means.

Not disclosing that I have an unrepresented buyer for my listing, if asked, is a violation. If I have a variable commission (meaning that the commission paid by the seller is lower if I don’t have to share it with the buyer’s agent), I must disclose that differential. I do not have to disclose the price of each offer in hand, but I advise my sellers to allow me to do that when there are multiple offers.

Not following showing instructions, or showing up at a time other than what was set with the showing service, is a violation.

Showing your own listing on a day that you’ve said showings are not allowed is a violation of Article 3.

Not disclosing the status of a listing, for example if the home is under contract, is also a violation of Article 3. A couple agents have told me they weren’t going to change their listing to “Pending” on the MLS until the earnest money was received or inspection objection passed. The MLS will also discipline an agent for that.

Not getting verbal agreements in writing is a violation of Article 9. I always request instruction by email from my clients, and I create amend/extend documents when appropriate.

Not explaining fully any document presented to a client is a big no-no and a violation of Article 9. It’s so easy with today’s electronic documents to email them and say, “call if you have any questions,” but we need to be more pro-active than that.

Misrepresenting one’s level of success is a violation of Article 12. There’s a bus shelter ad I have seen for years by an agent claiming to be our county’s top agent, but I did the research, and it’s not true. That’s a violation not only of Article 12 but of real estate commission rules, as are many Code violations.

I once complained to the real estate commission about bus bench ads in which an agent claimed to sell a home every four days. It wasn’t true, and he was ordered by the commission to change his ads.

Knowingly giving inaccurate information about one’s listing is another violation of Article 12. Not disclosing a known hidden defect would fall under this article.

Inducing a client to terminate if the listing agent changes brokerages (and wants the client to follow him) is a violation of Article 16, as is soliciting a listing currently subject to an agreement with another broker. Another broker’s unhappy client can call me, but I can’t call them. Also, we must always ask a person who calls us or visits our open house whether they are working with an agent before offering to work with them. Failing to do so could lead to “sign crossing.”

When a listing expires without selling, the homeowner can expect to be deluged by phone calls, texts, letters, postcards and even door knocking by agents whose business model involves soliciting expired listings. A common error by such agents is to fail to check whether that listing is already active on the MLS with another agent or brokerage. Another error is to mistake the “withdrawn” status for the “expired” status. “Withdrawn” indicates that the listing is not active but still subject to a valid listing agreement. When you get such a solicitation, give your listing agent that agent’s name so he can contact that agent and tell him/her of the violation. When one of my listings expires, I tell the seller to expect that deluge.

As stated above, non-Realtors don’t have to abide by the Realtor Code of Ethics, but, as I also stated, many violations of the Code are also violations of law and/or real estate commission rules. The Realtor associations and the commission count on clients and agents reporting violations.

Just Listed: A Solar-Powered Home in Arvada With Hyatt Lake Membership

High-end improvements and Hyatt Lake membership make this home at 6127 Holman Street special. It was just listed for $995,000. At the end of a cul-de-sac, a gate on the back fence draws you to Hyatt Lake for swimming and non-gas-power boating, paddleboarding, and fishing. The owned rooftop solar panels, not visible from the street, meet most or all of this home's electric needs. Although it’s a 2-story home, the primary suite is on the main floor with its own access to the 16’x16’ covered deck. There’s also a main-floor study/den. Two guest bedrooms are on the top floor, and a 4th bedroom is in the walkout basement. The seller is a woodworker, and his work and attention to detailed improvements is obvious throughout, such as the hanging shelves in the great room. The 3-car garage is lighted and powered to support a workshop and is heated and cooled by a heat pump mini-split unit. A Tesla wall connector in the garage is included. The kitchen has special touches, including quartz countertops, undercabinet lighting, ultra-high-end Schuler cabinetry, Bosch super-quiet dishwasher, and LG refrigerator with a cold-saver door. The upgrades are so extensive that I urge you to look at the room-by-room details spelled out at www.JeffcoSolarHomes.com.  Kathy Jonke will be holding it open this Saturday, March 2nd, 11am to 1pm.

Propane Is Proposed for Backup

An article on CustomBuilderOnline.com argues that propane is the ultimate uninterruptible energy source, and it actually makes sense and will appeal to people worried about disruptions of the power grid. The article makes the point that having a tank of propane and a propane-powered electric generator can keep you warm or cool and able to cook even if you have an all-electric home. Because propane does not degrade and can last forever in a tank (and works even during the lowest temperatures), it’s the best way to make sure life goes on for you, whatever happens to other energy sources.

Passive-Certified Homes in Boston

An article on www.ProBuilder.com described three certified passive-house homes built in Boston MA by Brucewood Homes.  Architect Mike DelleFave says they achieved PHI-certified status by adhering to three passive house principles: air-tight construction, high-performance windows, super insulation of the building envelope, thermal bridge-free framing, and heat recovery ventilation. The three 2500-square-foot homes were sold for about $1.4 million each before they were even completed, demonstrating the appeal of such homes.

Non-Profit Helps Seniors Find Housemates as an Alternative to Downsizing

A Denver Post article last week told of a non-profit which helps seniors living alone in a big house to find roommates, not just for companionship, shared expenses and mutual caregiving, but as a way to “age in place” instead of selling and finding a smaller home or apartment.

This reminds me of how I, single at the time, was able to afford my first Denver home back in 1997. I asked a male friend, Dave Garton, if he would be interested in sharing a home if I bought it. He said yes, and I bought a home with a walk-out basement. We shared the kitchen, but we each had our privacy. When I met Rita, Dave bought his own home, and Rita and I bought a new house.

That’s all for this week. I welcome your topic suggestions!