Those of us who are Realtors have had to go through the ethics class and agree to abide by their code of ethics. Part of that states that (paraphrasing, here) we aren't to speak negatively about any other Realtors...
So, what happens when you witness agents deliberately misleading a customer? I was showing a house with the listing agent, and i was acting as a subagent. The customer asked about what appeared to be all new sheetrock and trim in only one half the house. The other agent said the sellers were in the process of remodeling when his job transferred him (not true- the house is getting ready to be foreclosed on and they are pushing it hard). As the buyer went outside to look at the yard again, the agent tells me that she told the sellers to replace all the cracked sheetrock and get some trim up around the ceilings so people wouldn't see how bad the settling was and realize the foundation has serious problems. She said it would never sell in time if they hadn't covered that up...
As it turned out, the buyers didn't want that one, but they have asked me a few times since what I think of the other agent. I tell them she sells a lot of houses, but try hard to be noncomittal about my real opinion, even tho I feel I should be honest. yet if i am, they know she lied, and it looks like I'm bad-mouthing her. If they had wanted the house and I told them what she had told me (disclosing adverse material defects), then I would be telling them that she lied, and that would appear to be a violation of the code of ethics.
Should her actions be reported to the Board, or to her Broker (who i don't think will care as long as she keeps making him money)? By RE law,we owe honesty and fair dealing to all parties, so not revealing the truth about another agent seems to violate that. Where is the line between the code of ethics and the law? How would you guys and gals handle this situation and other violations you become aware of?

You should most definitely file a complaint with your board. Exposing an unethical agent is not bad-mouthing.

Not being a lawyer, I am not sure if not blowing this whistle makes you a conspirator to this agents fraud and exposes you to legal liability, but I would bet that it does.

More importantly, it would seem to me that you know what she did is wrong. If you don't do what needs to be done to protect the public from this person and she continues to defraud people (and she will) won't that weigh heavily on your conscience? I think it will.

This is not just a violation of ethics, it is gross misrepresentation. It is unfortunate for you that you witnessed this, because if you don't report, you are just as guilty as they are.

Ok, what about an agent who looks at one of my REO listings, tells me she wants to buy it and asks if she will get a commission, acting as a principal in the transaction. I tell her no. She brings in the offer the next day, written up in her parents' names with her as a buyers agent. No disclosure on their relationship and her interest in the property. I did relay that to the asset manager, who actually didn't care- they wanted it sold. She has since resold it again, under her parents names, but telling people it is her house. Again, a violation of the laws regarding disclosure. And to add insult to injury, SHE is now getting the business from that reo company...

Well I think she went about getting it the wrong way, but I am not sure why she was not entitled to the commission just because she was a principal in the transaction.

zephyr, although you were a sub agent to the seller, and you did not represent the buyer, the requirement of disclosing “adverse material facts” to the buyer was paramount. The listing agent should have been made aware immediately of his collusion to try to hide the adverse material defects. As to the motivation (foreclosure), it was not required to be disclosed.
I think reporting the agent to their broker would have been the right thing to do, because as a subagent to the seller, your liability just increased because of the other agent’s actions.

It depends on the company who is selling the house. Some of them spell it out plainly that the selling agent gets no commission if buying the house. Some don't care.

zephyr,
You should immediately file a complaint with the ethics committee on this agent. There is not only ethics violations but also disclosure violations. Failing to file a complaint makes you party to these violations.

There is also a diference between bad mouthing another agent and answering a direct question with factual information.


[QUOTE]So, what happens when you witness agents deliberately misleading a customer? I was showing a house with the listing agent, and i was acting as a subagent. The customer asked about what appeared to be all new sheetrock and trim in only one half the house. The other agent said the sellers were in the process of remodeling when his job transferred him (not true- the house is getting ready to be foreclosed on and they are pushing it hard). As the buyer went outside to look at the yard again, the agent tells me that she told the sellers to replace all the cracked sheetrock and get some trim up around the ceilings so people wouldn't see how bad the settling was and realize the foundation has serious problems. She said it would never sell in time if they hadn't covered that up...[QUOTE]

zephyr,
nothing illegal buying the reo property under parents name and then getting the commission. There are just a couple of Asset companies that refuse to pay commission if agent involved. Most agents use trusts or LLC's to purchase properties so this is not really an issue.
She most likely had herself added to title with a quit claim deed and then was diclosing agent interest to abide by the law. She did not violate disclosure laws.

Regarding her getting the REO business, what were you told by your asset manager as to why she is now getting their reo business and you are not?

Paul,
In Missouri, the law reads as follows..." a licensee shall not acquire an interest in, sell, buy, exchange, rent or lease any real estate, directly or indirectly, without first making the licensee's status as a licensee known in writing to the other parties in the transaction.
Before,buying, exchanging, selling or leasing real estate for another party, the licensee shall disclose in writing any ownership which a licensee has or will have and the licensee's status as a licensee to all parties to the transaction."
She does have an LLC, but still she would need to disclose, as that gives her an interest in the property.
The asset manager has not returned my phone calls or emails, so the "why" is still up in the air. I had listed 2 from them and got 'em sold under half the normal selling time for these parts, and the selling prices were within $1000 of my bpo values, but they aren't even sending me any more of those. I would love to know- maybe there is something i didn't do up to their standards, or screwed-up on.I cannot fix it if I don't know what it is!

Technically she did not violate the law as her parents purchased the property and she added her name later.

It specifies any interest the agent "has or WILL HAVE..." That and the "directly OR indirectly" acquire are what tell me she should have disclosed, in writing, her status. I let the asset managers know, but as I said, they didn't seem to care.