Fellow Colleagues:

It’s that time of year where your input is needed.   As many of you know this year I have the privilege of serving you as NAR’s Vice Chairman of the Risk Management Committee.  Once again, from a risk management perspective, tell me what you think are some of the emerging trends or issues that will impact the real estate business over the next year or so.

All of us are cognizant of the dominate role short sales continue to have in our market place and the work that still has to be done to improve the conditions when handling this high risk transaction with all parties.  We know that competency when handling REO properties, from both a listing agent and buyer’s agent perspective, is under scrutiny and is starting to take center stage.  In many instances we are not fully aware of unintended consequences and possible negative ramifications.

In addition to the two major issues identified above what in your view are some other emerging trends?  For example:
• Some fellow REALTORS® across the nation have experienced a serious condition resulting from imported dry wall containing toxic and potentially dangerous materials being used in remodeling and new construction. 
• Others have reported that Lenders are declining to provide LBP disclosures on properties acquired through foreclosure. 
• Many have seen an increase in mold in FHA foreclosed properties and the inability to obtain financing through FHA programs.
Arizona REALTORS® have always pioneered when it comes to foreseeing potential challenges and how they can be remedied.  Here is your opportunity to maintain our leadership role.  As soon as is practicable let me know what’s happening in your “neck of the woods.”   Send your responses to jjt@GoTucson.com  Thanks in advance for your input.

Case #1-1: Fidelity to Client (Originally Case #7-1. Revised May, 1988. Transferred to Article 1 November, 1994.)

Client A complained to a Board of REALTORS® that two of its members, REALTORS® B and his sales associate, REALTOR-ASSOCIATE® C, had failed to represent the client’s interests faithfully by proposing to various prospective buyers that a price less than the listed price of a house be offered. His complaint specified that REALTOR® B, in consultation with him, had agreed that $137,900 would be a fair price for the house, and it had been listed at that figure. The complaint also named three different prospective buyers who had told Client A that while looking at the property, REALTOR-ASSOCIATE® C, representing REALTOR® B, when asked the price had said, “It’s listed at $137,900, but I’m pretty sure that an offer of $130,000 will be accepted.”

REALTOR® B and REALTOR-ASSOCIATE® C were notified of the complaint and requested to be present at a hearing on the matter scheduled before a Hearing Panel of the Board’s Professional Standards Committee.

During the hearing, REALTOR® B confirmed that he had agreed with Client A that $137,900 was a fair price for the house, and that it was listed at that figure. He added that he had asked for a 90 day listing contract as some time might be required in securing the full market value. Client A had agreed to do this but had indicated that he was interested in selling within a month even if it meant making some concession on the price. The discussion concluded with an agreement on listing at $137,900 and with REALTOR® B agreeing to make every effort to get that price for Client A.

REALTOR-ASSOCIATE® C said in the hearing that REALTOR® B had repeated these comments of Client A and he, REALTOR-ASSOCIATE® C, had interpreted them as meaning that an early offer of about 10 percent less than the listed price would be acceptable to the seller, Client A. Questioning by the Hearing Panel established that neither REALTOR-ASSOCIATE® B nor REALTOR-ASSOCIATE® C had been authorized to quote a price other than $137,900.

It was the Hearing Panel’s conclusion that REALTOR® B was not in violation of Article 1 since he had no reason to know of REALTOR-ASSOCIATE® C’s actions. The panel did find REALTOR-ASSOCIATE® C in violation of Article 1 for divulging his knowledge that the client was desirous of a rapid sale even if it meant accepting less than the asking price. The panel noted that such a disclosure was not in the client’s best interest and should never be made without the client’s knowledge and consent.

By Carole Ridley, AAR Professional Standards Administrator

Review your current marketing materials and marketing strategy to make sure they comply with the NATIONAL ASSOCIATION OF REALTORS® Professional Standards Committee's recently approved changes to Case Interpretations for Article 12, Standard of Practice 12-12. As the Internet evolves, so too does the Code of Ethics and Standards of Practice for REALTORS®. Article 12 was revised for 2008.

REALTORS® shall be careful at all times to present a true picture in their advertising and representations to the public. REALTORS® shall also ensure that their professional status (e.g., broker, appraiser, property manager, etc.) as REALTORS® is clearly identifiable in any such advertising. (Amended 1/93)

REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional. (Amended 1/08)

If you use the Internet to market your services and listings, then you'll want to be aware that
Case Interpretations for Article 12, Standards of Practice 12-12, have also changed to reflect the ever-evolving world of technology. Check your website for compliance!

• Standard of Practice 12-12 REALTORS® shall not:
1. use URLs or domain names that present less than a true picture, or
2. register URLs or domain names which, if used, would present less than a true picture. (Adopted 1/08)
• Based upon Case Interpretations for Article 12, Standard of Practice 12-12: Do a thorough investigation when registering a new domain name.
What you can do:
• A broker can register a domain name (i.e.upnorthrealestate.com) even if not the brokerage firm name and if not similar to any other area real estate company
What you can not do:
• A broker cannot register a URL that is the same of another brokerage in the area.
• A sales associate cannot use a URL registered by the former broker without the broker's release or until the URL expires.
• The broker cannot use the URL if the sales associate is no longer with his/her firm.
• Use a "slightly misspelled" domain name of competitor's firms.

REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.