ETHICAL and/or LEGAL?

15 Replies

Hi Folks...

I have a burning question I hope you guys and gals can help me with.

Is it ETHICAL and/or LEGAL for a Real Estate Agent to be the Listing Agent on a Property he/she owns as a managing member of an LLC?

It's the norm, and yes, yes.

Yes.  Here they are required to disclose it in the listing.

Ok. But would that have to be disclosed on the MLS listing and/or upfront to a potential buyer?

That's why many have a license, they may represent their own interests, when they do, they must advertise as being an "owner/agent or owner/broker" and disclose their position upon the first opportunity, generally. That goes for representing any business entity they may have an interest in.

Since I've been pushing RE fundamentals today, here is an example, this is covered in those text books for agents I keep suggesting, here, the new text is about $35.00, find a new Realtor, they might sell you their copy for less or loan it to you. Sometimes, your local Board of Realtors will have a library, they may allow the public to have access as a good PR aspect. You don't have to spend $995.00 and suffer through some up sale seminar to learn RE!

Study well! Do Good! :)

It's totally ethical and legal. In NC, we are to disclose that we are both the owner and broker of a property. 

why does it matter?

Yes it wouldn't make any sense the other way around.

Yes disclose on contract and advertisements such as MLS listing.

Here, licensee disclosure as a principal must be made "prior to entering negotiations". Disclosure in the MLS is not mandatory as per law (perhaps by MLS rules) but it helps get it out of the way early. Again, why is it a concern?

It was of concern because the listing agent/ owner was presenting the property as though he was representing someone else. Most of the dialog and negotiations gave the impression that the agent was representing someone else. Phrases like: "I need to check with the owner" or "let me ask the owner" or "The sellers have turned down other buyers because...." and after our thorough due diligence it was discovered that the agent is in fact the owner. 

So that is why it is of concern.

We didn't get and still don't get that the Agent is being honest in his representations. And his status as agent/principal etc...was not and is still not being disclosed by the agent. 

@Moziah Scott  

If that is truly the case, you always have the option of calling the agent's broker and/or reporting the incident to the state licensing agency.

Not sure why the agent hasn't revealed his interest yet, may not be for some devious reason though.  Just like some landlords don't want the tenant to know they're the owner, they get to say "let me check with the owner" as opposed to "no, I can't do that".  I would have told you upfront though.

Just report the guy to the broker, MLS and the state board. You'll be doing the industry, the community and yourself a favor. If it's his first mess up, he probably won't lose his license but be suspended awhile, his broker may chew on him a bit. He needs to learn that's not how things are done. You can also be doing him a favor having the matter corrected now instead of later on when he gets involved in a closed transaction with other issues, where he could lose his license and be hammered with fines or damages.

Getting bad actors to correct their ways is not often seen by them as a favor to them, put it really is, if they continue they can get in worse trouble later on, they usually don't look at it like that. If they are just sneaky types, they don't need to be in the industry. :)   

I'd agree with Bill G. on this one.  The way he is presenting the property and not disclosing his interest is sleazy.  If you don't have a broker, I'd pull one in and make sure they look out for your interests.

I've been told by my broker in MN that I'm not allowed to represent the buyer in a personal transaction. I have to find a buyer's agent for the buyer. I don't know if that is MN license law, NAR ethics or broker's rules.

Originally posted by @JOAN DICKIE:

I've been told by my broker in MN that I'm not allowed to represent the buyer in a personal transaction. I have to find a buyer's agent for the buyer. I don't know if that is MN license law, NAR ethics or broker's rules.

 or common sense/decency ....

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