Andrew Wetzel's Musings

March 23, 2019

Cooperation in Real Estate

Filed under: Buying,Ethics,Marketing,Selling — awetzel @ 3:45 PM

Real Estate, like many professions, has its own vocabulary.  In addition to using many acronyms, Real Estate uses what appears to be common words that really mean more than they imply.  One such word is “cooperation” which generally means “the process of working together to the same end”.  While largely true in Real Estate, a profession which is based on bringing sellers and buyers together, there is more to it than that simple statement.

Cooperation among competing professionals in any line of work is unique and competition is at the heart of the Real Estate community.  We compete for and on behalf of buyer and seller clients and then cooperate to match them with each other, with each party typically having their own exclusive representative.  While the “end” result may appear similar, meaning that both parties have to agree to transfer ownership of a property, there is much that happens along the way.  This is NOT a “retail transaction” where funds and goods are swapped instantaneously.  Cooperation embodies the relationships among agents and our rules define the requirements.

REALTORS have a Code of Ethics consisting of 17 Articles.  Our Code of Ethics is built on the principal of protecting the public and advancing the interests of home buyers and home sellers.  Cooperation is so important and intrinsic to what we do that it has its own Article and it is number 3.  It begins with the statement “REALTORS shall cooperate with other brokers except when cooperation is not in the client’s best interest.”  The client is the boss and gets to make or not make the critical decisions and we owe our clients 6 “fiduciary duties”.  One of them is “obedience”, meaning that we have to obey their lawful instructions.  There are times when clients will not want us to cooperate with each other but that does not relieve us of the obligation to act ethically and professionally.  For example, we need to respond to inquiries even if to advise the person inquiring that we are not “cooperating”.

Article 3 has ten “Standards of Practice” (or SOP) which interpret the Article.  Standard of Practice 3-10 defines cooperation.  It says “The duty to cooperate relates to the obligation to share information on listed property, and to make property available to other brokers for showing to prospective purchasers/tenants when it is in the best interests of sellers/landlords.”   That means that listing brokers will make their property listings and information about them, such as property disclosure and lead hazard statements, available to other brokers.  The goal of course is to identify prospective purchasers or tenants.  Accordingly, the default position for REALTORS is cooperation.  Sharing listings and listing information benefits the consumer.  Sharing increases “exposure” which should theoretically result in maximizing the selling price while minimizing the marketing time.  There are many variables that can affect either of those but no one can doubt the potential benefits to consumers.

Article 3 also discusses respecting the private ownership rights of the seller.  SOP 3-9 says “REALTORS shall not provide access to listed property on terms other than those established by the owner or the listing broker.”   This means that a broker must have permission to enter or to allow others to enter a property which includes how to schedule showing appointments and inspections, arriving when scheduled, managing delays in arriving on time and canceling showings when necessary in addition to who must be present for appointments and showings.  It is safe to assume that an agent is expected to accompany all showing and appointments.

The Code of Ethics was created in 1913 and has been amended over the years.  The greatest changes to it have been those related to technology and the law.  For example, since 1913 we have seen the inventions of fax machines, email, texting, scanning, electronic signatures and the Internet, all of which changed how we do business.  Exclusive buyer agency and the multiple listing service have also dramatically changed our profession:  allowing each party to be exclusively represented and making marketing so much easier than before.  That being said, the competitive nature of the profession will always cause issues and misperceptions about our conduct.  Are we working for our client’s best interests or our own?  That question often arises when an agent is dissatisfied with something that has prevented them from getting what they or their client want.  While it is a good question, we need to ensure that we are not jumping to conclusions that are wrong and we need to make sure that we have done all we can to resolve any discord that arises.

Not surprisingly, the perceived lack of cooperation can be very frustrating.  We are expected to share information and to be honest with each other.  The primary focus of this involves making properties accessible and disclosing when a property is under contract.  Few things in Real Estate are more frustrating than having a buyer interested in a property for which we have no information and are unable to get the information that our buyers need to decide whether to request an appointment or not.

“Coming Soon” listings generate much of that frustration as many agents point to a lack of cooperation when simply trying to get the information their clients want, need and expect.  The practice itself is perfectly legal and acceptable if handled according to our rules and regulations.  Cooperation, at the very least, may simply mean that we return a call, an email or a text when a fellow agent inquires about one of our listings.  If the listing is an “exclusive” one, meaning that the seller has agreed that you will not compensate other agents for bringing a buyer to them, that must and should be communicated so that the inquiring agent can advise their client and plan accordingly.  When communication is lacking, it is too easy to assume something is wrong.

One of the great lines in literature is “no man is an island”.  As REALTORS, we are independent contractors in business for ourselves.  However, through our network of associations and our Code of Ethics, we are not in business by ourselves.  Cooperation is what makes our profession work best and, aside from the issue of ethics, failing to cooperate, even if that means telling a fellow agent something they do not want to hear, is unprofessional, short-sighted and reflects poorly on the profession.  We are judged by the company we keep.

There is no time for inexperience, empty promises or false expectations!

 Remember:  HIRE WISELY!  We are not all the same!

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