Listing Agreements & Contact by Seller-Client of Another REALTOR®

Q: I have been contacted by a builder about listing his homes. He currently has them listed with another firm, but plans to change once his listing agreement expires. I have  not met with him yet. Is it okay to talk to him now or should I wait until his listing agreement expires?

A: You may talk to him now. Article 16 of the 2001 REALTOR® Code of Ethics says that REALTORS® shall not engage in any practice or take any action inconsistent with the agency or other exclusive relationship recognized by law that other REALTORS® have with clients. Standard of Practice 16-6 elaborates on Article 16 and says that when  REALTORS® are contacted by the client of another REALTOR® regarding the creation of an exclusive relationship to provide the same type of service, and REALTORS®  have not directly or indirectly initiated such discussions, they may discuss the terms upon which they might enter into a future agreement or, alternatively, may enter into an  agreement which becomes effective upon expiration of any existing exclusive agreement. If a REALTOR® were to meet with a seller under the circumstances set forth in  Standard of Practice 16-6, then the REALTOR® must not, of course, take part in any discussion concerning how to terminate an existing exclusive agency relationship with  another REALTOR®. A REALTOR® should also avoid conversations concerning other REALTORS®, their businesses or their business practices, lest such conversations  deteriorate into a violation of Article 15 of the Code (“REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices”).

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Filed Under: Code of Ethics,