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Legal Blog

The Legal Blog, brought to you by NVAR's Professional Standards department, helps you stay on top of the latest rules and regulations in the industry.

What Realtors® Need to Know About Expired or Cancelled Listings

By:
  • Matthew L. Troiani
Jul 8, 2019

Q. I have heard about services that will provide lists of recently expired or cancelled Bright MLS listings. What do I need to know to avoid violating our legal and ethical obligations?


A. Using such lists to “cold-call” customers is becoming a common practice and a variety of companies offer such lists. However, there are legal and ethical pitfalls to navigate in order to do this correctly.

First, Realtors® should check the MLS and confirm that the listing is either in “Expired” or “Cancelled” status before contacting the seller. Calls to the Legal Hotline and from consumers have provided anecdotal evidence that some Realtors® are receiving lists from those companies that include listings in “Withdrawn” status.

Article 16 of the Code of Ethics of the National Association of Realtors® states:

“Realtors® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other Realtors® have with clients.”

Under the Bright MLS Rules & Regulations, “Expired” or “Cancelled” status means that there is no longer an active brokerage agreement/listing contract with the seller. Therefore, the seller may be contacted without a potential violation of Article 16. However, “Withdrawn” status means that “the listing has been withdrawn from the market, but a contract still exists between the Seller and the listing broker.” Therefore, it is a potential violation of Article 16 to contact a seller on a listing that is in “Withdrawn” status.

Realtors® should also check the Do Not Call Registry before contacting a seller. Federal law provides that real estate professionals generally cannot call a person on the Do Not Call Registry unless the Realtor® has an “existing business relationship” with the person. An “existing business relationship” is one which extends for 18 months after the end of a transaction between the Realtor® and a seller. If you do not have an existing business relationship with the seller, then you cannot call the seller if their number is registered on the Do Not Call Registry. The Registry can be searched at: telemarketing.donotcall.gov. Federal law also requires that all companies keep their own internal “do not call” list, and you must check your company’s list before contacting the seller. If the seller is on your internal list, then you cannot call them, regardless of your relationship.

The Do Not Call Registry only applies to telephone calls. The fact that a seller’s number is on the Registry does not prevent you from sending a mailing or approaching that seller in person.

Virginia law further restricts your ability to make solicitation calls to the hours of 8 a.m. to 9 p.m. See Va. Code Ann. §59.1-511.

Q. What about For Sale by Owner (FSBO) Sellers? May I contact them?


A. The rules are the same if you are contacting a FSBO seller whose number is on the Do Not Call Registry and you are seeking to list the seller’s property. However, buyers’ representatives may contact the FSBO seller about a client’s potential interest in purchasing the property. You may only discuss your buyer client’s interest in the property with the FSBO seller and cannot use your client’s interest as a way to discuss the possibility of the FSBO seller listing the property with your brokerage.

Q. What about customers who contact our office to inquire about a listing?


A. This is an exception to the general rule. When a potential customer initiates the contact, then a Realtor® has the right to contact that person for the next three months. Calls are not limited to the person’s original inquiry. There are no limitations on what you may discuss with the person during those three months, thus you could discuss other listings.

Q. What about people who provide their contact information on an open house sign-in sheet? Have they initiated the contact?


A. This is a difficult situation without a clear-cut answer. The safest practice is to place a notice on the sign-in sheet alerting people that they are consenting to receive a follow-up call, while giving them an option to opt-out of receiving a follow-up. There are significant concerns about whether signing in at an open house constitutes an inquiry and whether the person had a reasonable expectation that they would receive a call from you. Therefore, providing notice of consent and providing an opt-out is advisable.
 
Group(s):
  • Listings
Categories:
  • Realtor® Professionalism