Feb. 10, 2006 - Case #10-4: Use of Choose Your Neighbor Marketing Letters

(Adopted November, 1987.)

REALTORŪ A listed a property in a new subdivision. At the instruction of his client, Seller X, REALTORŪ A did not file information on the listing with his Boards MLS, did not place a For Sale sign on the property and did not advertise the property in the local newspaper. Seller X had told REALTORŪ A that he wanted the sale handled quietly, with the new purchasers being people who would fit into the neighborhoodpeople with the same socioeconomic background as the other residents of the subdivision.

Based on his conversation with Seller X, REALTORŪ As only marketing effort was mailing a letter to the other residents of the subdivision, inviting them . . . to play a part in the decision of who your next neighbor will be. If you know of someone who you would like to live in the neighborhood, please let them know of the availability of this home, or call me and I will be happy to contact them and arrange a private showing.

REALTORŪ As marketing strategy came to the attention of REALTORŪ B, whose mother lived in the subdivision. REALTORŪ B filed a complaint charging REALTORŪ A with a violation of Article 10 of the Code of Ethics.

At the hearing, REALTORŪ B told the Hearing Panel of receiving a copy of the marketing letter from his mother, who had recently moved to the subdivision. REALTORŪ B advised the panel that he had checked the Boards MLS for information on the property, had driven past the house to look for a For Sale sign and had scanned the Sunday real estate section of the local newspaper for information on the property. Finding no mention of the property in either the MLS or the newspaper and noting the absence of a sign on the property, REALTORŪ B concluded that REALTORŪ As marketing strategy was to limit access to the property to individuals preselected by the current residents. In my mind, said REALTORŪ B, this could only mean one thing. REALTORŪ A was deliberately discriminating against home seekers from other areas, or those with different backgrounds, who would never have the opportunity to learn about the houses availability. Obviously, REALTORŪ A was directing all of his marketing energies into finding purchasers who would not disrupt the ethnic and economic character of the neighborhood.

REALTORŪ A defended his actions by advising the panel that he was acting on Seller Xs instructions. Seller X appeared as a witness for REALTORŪ A and confirmed this fact, adding that he and the other residents of his block had an informal agreement that they would try to find suitable purchasers for their homes if they ever decided to sell. Seller X felt that by broadening the marketing campaign to include all residents of the subdivision he had increased the chances of finding such potential purchasers.

The Hearing Panel found REALTORŪ A in violation of Article 10 of the Code of Ethics. In their decision, the panel advised REALTORŪ A that no instruction from a client could absolve a REALTORŪ from the obligation to market properties without regard to race, color, religion, sex, handicap, familial status, or country of national origin, as expressed in Article 10. There was no doubt, in the panels opinion, that the exclusive use of Choose Your Neighbor letters to market the property was designed to circumvent the requirements of Article 10.