Real Estate Law/Ethics

[D-Max]

I was completing a report today and the lender/client wants 1 pending sale. There was only 1 pending sale in the neighborhood so I included it. I called the listing agent to see if she would provide me with any info. She raked me over the coals telling me that she could not legally or ethically provide that confidential information because I was not involved in the transaction. As a licensed broker I remember something about this but I can't remember if it is law or REALTOR ethics.

The lender is now riding my case that they want me to use the contract price and not the list price. I told them that I couldn't legally obtain the information but they are insisting that I use another pending sale.

 

[Thomas Fiehler]

Very common practice around here also. Now if is an agent I know, I can probably the the information. Your software likely has a page for listings so just insert the data on that form-it doesn't ask for Sales Price, only the listing data.

 

[Couch Potato]

The lender is now riding my case that they want me to use the contract price and not the list price. I told them that I couldn't legally obtain the information but they are insisting that I use another pending sale.

Provide him with the brokers number. Explain you will be glad to use the contract price if he can convince the broker to send you a copy; otherwise he will have to settle for the list price.

I would never give you any information on a pending sale contract if you were not involved in the transaction. Only a fool would do that.

 

[Bob Ipock]

The information in the sales contract is confidential until the transaction closes and the public portion of the data is recorded and/or published. This is no different thn a real estate agent badgering an appraiser to tell them what a property appraised for.

A fairly significant % of "sales contracts" never result in a closing. If the agreed upon sales price were revealed and the the deal fell thru this # could be used as an advantage by a new buyer and/or agent.

The listing agent is correct in not revealing confidential terms of a contract and would be doing both the buyer and seller a disservice and committing an ethical breach.

Lisings mean nothing. Many listings today are based on adding up $$ owed on a mortgage, credit cards, equity line and a bass boat, rather than market values.

 

[Bob Ipock]

From Realtor Code of Ethics:

Standard of Practice 1-9

The obligation of REALTORS® to preserve confidential information (as defined by state law) provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any non-agency relationships recognized by law. REALTORS® shall not knowingly, during or following the termination of professional relationships with their clients:


reveal confidential information of clients; or


use confidential information of clients to the disadvantage of clients; or


use confidential information of clients for the REALTOR®’s advantage or the advantage of third parties unless:


clients consent after full disclosure; or

REALTORS® are required by court order; or

it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or

it is necessary to defend a REALTOR® or the REALTOR®’s employees or associates against an accusation of wrongful conduct.


Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended 1/01)

 

[D-Max]

Thank you all. I was 95% sure that the I was correct on this and only called the agent because I felt that the lender would call to verify my call.

USPAP I agree with you that listings are pretty much irrelevant which is why I don't understand why a lot of the lenders are now requiring pendings and listings in the report. Some even want expireds and cancelleds considered (read HSBC). I consider all data but I have enough common sense to know what is relevant and what isn't.

The problem with the report in this posting is that the home came in $7,000 under the contract price with the best comps only being 2 weeks old and almost identical to the subject. The pending sale that I used, again the only one, was listed $4,000 over the contract price of the subject which per the lender "would have made the deal work".

I think I finally explained myself well enough that they will leave me alone now. (wishful thinking perhaps).

Again thanks for the verification.

 

[Bob Ipock]

MY FAVORITE Realtor Code of Ethics portion......

Standard of Practice 1-3

REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.

 

[TJSum]

Even if you could get contract info, who's to say the contract does not get changed prior to settlement, it happens many times especially in this market...

 

[Couch Potato]

MY FAVORITE Realtor Code of Ethics portion......

Standard of Practice 1-3

REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.

There is an easy defense when accused of a violation, just claim it was stupidity and not a deliberate act. It's a very believable claim.

It is disgusting what some REALTORS® do for a listing.

 

[Queen City Gurl]

Just saw this thread.... what I do is adj the pending listing for what is typical in that area, which at least attempts to bring it inline with a closed sale.

MLS statistics can be obtained that states what the typical listing/sale ratio is..... homes in that area sell for approximately 2.8% of their list price.... etc. So, I will adj that comp 3% down. Of course, it's an approximation, but it is based on supported data for the area, and levels the field, so that, that comp is not indicating a false high range. I explain my adj. and have never had a problem. It's the best way, I can think of to address using pendings and listings as supporting data.