Active Rain February 25, 2011

You Can’t be Under Contract and Not Disclose That Fact

Croton GorgeI got a call today from an agent who claimed to have an interested buyer in one of my short sale listings. I informed him that all offers, per the instructions of my seller, would only be considered if they were in writing and accompanied by a pre approval letter or proof of funds. He used this as an opportunity to throw a number at me that the bank would never approve- so low that to tie the house under contract at that number would be irresponsible. 

He proposed the idea of having buyer and seller sign a contract, but to keep the house in “active status” on the Multiple Listing Service. “What would stop us from doing that?” he asked. My answer? “Well, aside from the Code of Ethics and the Department of State, not much.” 

He then dropped the name of an MLS official whom he thought would endorse the idea, but as Vice President of the MLS, I knew that he was barking up the wrong tree; the name he dropped was the guy who manages data, not the gentleman who oversees standards and practices. 

I called the Standards and Practices person myself as soon as we hung up and he confirmed that to sign a contract but to not disclose the “contract” status on the MLS-even if the principals agreed- would be a breach of article 12 of the Code of Ethics where we are bound to present a true picture of the facts.

Imagine being a buyer and seeing a house you liked, making an offer, proceeding with inspections and then finding out the owner signed a contract months before and was playing both ends against the middle waiting for a short sale approval. How would you feel?  Furious? Used? Deceived? All of the above?  

Shady business never makes for a sunny life. And if you are dumb enough to propose unethical conduct to someone without knowing who they are, you aren’t long for the business.