Feb. 10, 2006 - Case #16-14: Dealings Initiated by Another Broker Client

(Adopted May, 1999.)

REALTORŪ X, a residential broker, had recently listed a home. REALTORŪ Xs marketing campaign included open houses on several consecutive weekends.

One Sunday afternoon Buyer B came to the open house. REALTORŪ X introduced herself to Buyer B and asked whether Buyer B was working with another broker. Buyer B responded that he was, in fact, exclusively represented but went on to add that he was quite familiar with the property as it had been previously owned by a close personal friend. REALTORŪ X told Buyer B that she would be happy to show Buyer B through the home and answer any questions he might have, but added that she represented the seller and not Buyer B.

After viewing the home, Buyer B indicated that he was seriously interested in the property and intended to discuss a possible purchase offer with his buyer representative. REALTORŪ X responded that there were several other buyers interested in the property and that it would likely sell quickly. I can't tell you what to do, but if it were me, I would make an offer today, REALTORŪ X told Buyer B, You can go back and discuss this with your broker if you like or I can help you write a purchase contract. Its your choice. With REALTORŪ Xs words in mind, Buyer B decided to make an offer. REALTORŪ X assisted Buyer B in filling out a standard form purchase contract which was accepted by the seller later that day.

REALTORŪ X was subsequently charged with violating Article 16 for dealing and negotiating with a party who had an exclusive relationship with another REALTORŪ.

At the hearing, REALTORŪ X defended her actions noting that she had told Buyer B that she was the sellers exclusive agent and, as such, would not and could not represent Buyer Bs interests. She pointed out that Buyer B had asked for her help in writing a purchase offer and had not sought the counsel and assistance of his exclusive representative. She concluded her defense noting that Standard of Practice 16-13 authorizes dealings with the client of another broker when those dealings are initiated by the client.

The Hearing Panel disagreed with REALTORŪ Xs reasoning. They concluded that REALTORŪ Xs inducement of Buyer B by emphasizing that the property might sell quickly (which might well have been true), coupled with her offer to prepare a purchase contract on Buyer Bs behalf, constituted an initiation of dealings on the property by REALTORŪ X, not by Buyer B. As a result, REALTORŪ X was found in violation of Article 16.