Stepping Over a Sign
One of the older phrases sometimes used in real estate is when one competitor accuses another one of “stepping over my sign”. This means (or should mean) that an agent interfered with a valid listing, by approaching the owner directly to either list or try to list the property. In the case where an exclusive listing is present, this is a violation of the REALTOR® Code of Ethics. Standard of Practice 16-4 which states: “REALTORS® shall not solicit a listing which is currently listed exclusively with another broker. However, if the listing broker, when asked by the REALTOR®, refuses to disclose the expiration date and nature of such listing; i.e., an exclusive right to sell, an exclusive agency, open listing, or other form of contractual agreement between the listing broker and the client, the REALTOR® may contact the owner to secure such information and may discuss the terms upon which the REALTOR® might take a future listing or, alternatively, may take a listing to become effective upon expiration of any existing exclusive listing. (Amended 1/94)”
However, life isn’t always simple. If you read that Standard of Practice, you will note that the REALTOR® seeking (soliciting) the listing has the right to ask about the expiration date and nature of the listing. Simply put, an “open listing” is what it sounds like: open, non-exclusive, and not protected. Surprisingly, some agents still take open listings. And, an exclusive listing which has expired is, well, no longer a listing.
The other issue, though, is the agent who keeps a sign on a property after the listing has expired. I got a call this week from an agent who had listed a property which had been formerly listed (last fall) with another brokerage. The property is a seasonal one, which may help to explain why, in January, the lockbox and sign were still on the property. When the second agent listed the property, she was accused of “stepping over our sign” because there is still a sign on the property. Despite requests from the owners, the first agent had not removed the lockbox or the sign. The second agent asked me: “Can they do that?”
My answer is: No! The authority we have as agents to put signs and lockboxes on property; advertise and market property; show and hold Open Houses on property is all found in the listing contract. In every state law I’ve examined, exclusive listing contracts between agent and seller must have a definite ending date, with no automatic renewals. And, state laws similarly state that agents must have permission to put up a sign, advertise, or show property. In other words, the agent has to get authority from the seller to continue the listing—and the permissions given in the listing. Exclusive contracts have a fixed ending date. Having an exclusive contract is like being pregnant—you either are (you have an exclusive contract) —or you aren’t (you don’t have one). There is no in between. As far as the Code of Ethics goes, there are two Standards of Practice which direct us, as REALTORS® to honor a seller’s instructions with respect to showings. They are:
Standard of Practice 1-16
REALTORS® shall not use, or permit or enable others to use, listed or managed property on terms or conditions other than those authorized by the owner or seller. (Adopted 1/12)
Standard of Practice 3-9
REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker. (Adopted 1/10)
So if you are a REALTOR®, have exclusive contracts—the Code of Ethics urges exclusive representation of clients—and recognize that when your contract ends, so does your authority.
Melanie J. McLane is a broker, appraiser and educator. She covers this topic in her course: “Dollars and Sense”. She can be reached at Melanie@theMelanieGroup.com
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