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Is it ethical to use information obtained from (MRIS) listings to identify leads, such as ones that are listed as withdrawn, expired and tempoff for future solicitation?

By:
Sep 30, 2016

Agency

Question: Is it ethical to use information obtained from (MRIS) listings to identify leads, such as ones that are listed as withdrawn, expired and tempoff for future solicitation?

Answer: In order to understand the ethical obligations of REALTORS®¨, we should start by reviewing the appropriate portions of the National Association of REALTORS®Code of Ethics and Standards of Practice. Article 16 of the Code of Ethics states a "REALTOR® shall not engage in any practice or take any action inconsistent with the agency or other exclusive relationship recognized by law that other REALTORS®have with clients." Many experienced REALTORS®refer to this as the ethical prohibition against "going behind the sign."

There is also a Standard of Practice that applies to the issue we are considering. Standard of Practice 16-2 clarifies the scope of Article 16 by differentiating between general solicitations (or mass solicitations) to prospective clients and targeted solicitations of specific individuals who are identified through MLS compilations. A general solicitation is defined as a solicitation "in a given geographical area or in a given profession, business, club or organization" Under this Standard of Practice, general solicitations are acceptable, even if some of the recipients are exclusively represented by other REALTORS®¨.

However, the Standard of Practice does single out two types of solicitations as unethical under Article 16. The first type of unethical solicitation is "telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another REALTOR®." The second type of unethical solicitation is mail or other forms of written solicitations that are "directed specifically to property owners identified through compilations of current listings, For Sale or For Rent signs, or other sources of information required by Article 3 and Multiple Listing Service rules to be made available to other REALTORS®under offers of subagency or cooperation."

When considering the ethical obligations of Article 16 and the relevant Standards of Practice, we should ask the question, is the exclusive listing agreement still current? When the listing agreement has been terminated and the agency relationship has ended, it is ethical for other REALTORS®to solicit the business of the former client. However, if the agency agreement is still in force and has not been terminated, targeted solicitations of the seller may be viewed as interference in another REALTOR®'s relationship with his or her client.

This brings us back to the question about using the MRIS system to run reports to identify listings with a status of withdrawn, expired or tempoff for targeted solicitation. There is some confusion about what these "status type" terms mean in the MRIS System. This confusion has caused problems when members have incorrectly assumed that properties in all of these categories were no longer subject to a current listing agreement. It has also led to problems when listing agents have incorrectly listed a property under the wrong status type, creating an impression that a brokerage agreement had been terminated when in fact it was in full force and effect. To help resolve this confusion, we should review the appropriate meanings of these terms in MRIS.

Tempoff should be used to indicate that the property is not available for showing. This status is for short-term use and must have seller approval. The property may be unavailable for showing because the owner is completing renovations or a tenant is being uncooperative about allowing access. A tempoff listing in MRIS is still subject to a current, valid brokerage agreement.

The Virginia Real Estate Board requires licensees to have an expiration date in their brokerage agreements. After the expiration date, the listing status is automatically changed by MRIS to expired to indicate that the agreement has lapsed. Unless the client and licensee agree to an extension, the agreement is terminated after this date.

Withdrawn indicates that the listing agreement has been terminated prior to its original expiration date. This term is used to indicate that the listing broker and owner have mutually agreed to terminate their representational agreement prior to the original expiration date.

The main problem that resulted from this confusion about these terms is that listing agents were entering incorrect status types. For example, a seller may have discovered a cloud on the title or an uncooperative tenant that is preventing access to the property. The problem could take a few weeks to resolve. An agent for this listing may mistakenly believe they could change the status to withdrawn instead of tempoff in order to reset the days on market counter in MRIS. Unfortunately, the agents attempting to get around the days on market counter may cause other REALTORS®to assume that the owner is not subject to a valid brokerage agreement and send out a targeted solicitation to the owner. A REALTOR® accused of unethical conduct for soliciting this listing could use as a defense the fact that the listing agent's incorrect change of the listing status created an appearance that the brokerage agreement was terminated. To avoid this situation, the listing agent should either leave the property as active or change the status to tempoff. Also remember that entering an intentionally incorrect status to reset the days on market counter is a violation of MRIS rules and may lead to fines against the agent.

In summary, the expired and withdrawn status types indicate that the listing broker no longer has a brokerage relationship with his or her client. The tempoff status type is used to indicate that the owner of the property has an ongoing brokerage relationship with the listing broker. Therefore, a Professional Standards Hearing Panel may find that solicitations of expired and withdrawn listings are ethical, because those status fields are intended to indicate terminated listings. However, a hearing panel may find that solicitations of tempoff listings to be a possible violation of Article 16, as supported by Standard of Practice 16-2, because the solicitations are targeted at owners who are still subject to a brokerage agreement and the owner was specifically targeted for solicitation by a compilation of information from a current MLS listing.
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