When Can New Listing Agreement be Signed?

QUESTION: A property owner just called me and asked me to list her property for sale. She has been trying to sell that property through another firm (we’ll call it “Firm A”) for  the last six months and she is ready to make a change when her exclusive listing agreement with Firm A expires next week. I’m worried about whether I will be violating the  Code of Ethics if I take the listing now. What can I do?

ANSWER: Although you are wise to consider your ethical obligations in these circumstances, the fact is that you can go ahead and sign a listing agreement today, as long as  it is effective upon the expiration of the existing exclusive agreement. The applicable Code provision is Article 16 of the Code of Ethics. It states that REALTORS shall not  engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS have with clients.  Under Standard of Practice 16-4, REALTORS are not to solicit a listing which is currently listed with another broker. However, under Standard of Practice 16-6, when it is the  client who initiates the communication, the REALTOR is permitted not only to discuss the terms on which they would enter into a future agreement, they may actually enter into a new agreement. The only condition is that the new agreement becomes effective upon the expiration of any existing exclusive agreement. If you use the standard  Exclusive Right to Sell Listing Agreement, be sure to complete paragraph 1 so that the Effective Date commences upon the expiration of Firm A’s listing agreement.