One of the big selling points about being a Realtor® is that we have a "Code of Ethics" to guide our behavior in all our real estate dealings. True - except when a Realtor® crosses state or even county lines.
My market Ocala, Florida is a destination spot. It was also featured in the national media as one of the areas leading the nation in appreciation. Investors and speculators flooded in. Wow, the same people who knew not to buy a stock or bond from a puff piece in these publications were suckered in by the buss load, and bought high in hopes of selling higher.
I digress. One buyer submitted two identical contracts on a lovely pool home that was owner occupied. I was the listing agent, and the two contracts were from two other Realtors® in the area, one of which called me five minutes after faxing it to me, saying the buyer had changed his mind. The other contract was presented; we had an offer, counter offers, and more counter offers. One sticking point was the timing of certain deadlines. The original contract was a FAR BAR residential contract where time over a week is measured in calendar days. The seller wanted 15-20 for mortgage approval, the buyer wanted 30 or more. We had countered with a standard kick-out addendum which is another FAR BAR standard fill in the blanks form. On giving this to the buyer agent(in person) I was called every name in the book including "unethical" and "practicing law without a license" for "making up forms and putting the FAR logo on top of them." The other broker finally got involved and told me my sellers were being "unreasonable" which while being closer to the truth, was more accurate. The buyer's agent finally submitted a new contract on the FAR form with a 20 day mortgage approval. Of course the 20 day period on the far contract is business days, and in November, which has numerous national holidays, worked out to be one day more than 30 days on the FAR BAR contract. It took over a month and a half to get a signed contract both parties could live with.
I say that only as an example of the nonsense my poor sellers had to deal with over the entire escrow period. Every issue from home inspection, to closing was packed with the same drama. Since the buyer was from out of state, had bought the property sight unseen, and had originally submitted two contracts with two different Realtors® there was a procuring cause dispute. This was the worst escrow I have ever been part of.
The buyer delayed the closing, using a few scummy techniques, including showing up late (because he just got into town), refusing to close without doing a walk through, trying to re negotiate the price, and refusing to close if the title company didn't accept an out of state personal check for $23,000, among other things. In short he took these sellers and chomped down and did the alligator roll.
Here is the kicker. When I was talking to him and his agent I tried to remind them of their responsibilities under the contract, and the buyer let me know he was a "broker." I let him know that it should have been disclosed in the contract, he told me his license was in NY and since Florida didn't reciprocate, Florida viewed him as any other buyer. I asked "Are you a Realtor®? That should have been disclosed in the contract." He said that it didn't apply out of state brokers.
After the closing I tried to file a complaint against him and the other agents with our local board. The local board would only hear complaints against other local members and not out of state Realtors®. I had to pay $500 each if I wanted to complain about the local Realtors® and as a non member of the board in NY, I didn't have to pay a fee, but I had to show up in person at the hearing at a cost of about $1,000 for airfare, car rental and hotel. What is the big deal? Here is a copy of the contract, there was no disclosure that the buyer was a Realtor®, violation of the Code of Ethics standards of practice, case closed. Why should this kind of misbehavior cost me to complain, when it is an open and shut case? Also,by challenging these guys at their respective boards, all that would happen is selling agents would say "I only reported what the buyer let me know," and the buyer would say "I am not a Florida license, so I trusted the other Realtors® to fill out the contract correctly with all the information I gave them." They would probably walk away with warnings "be more careful next time" like there should be a next time, and I would be out $2000.
The so called Code of Ethics is nice on paper, but until it is enforced nationally it is nothing more that window dressing and a good excuse for Realtors® who behave badly to invest out of their local area, because they have impunity.
I have since received contracts from this same buyer on four of my other listings, none of which indicate that this renegade buyer is a Realtor®. If NAR and the local boards are not going to stop this behavior, who will?
My sellers were abused by unethical Realtors®. Instead of a semi secret executive meetings to raise dues without bringing it to a vote from the general membership, or blasting 60 Minutes, Redfin and Zillow, perhaps NAR should focus on insuring members comply with its core ethical values - even across state lines.
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