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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.

When can a Buyer's Agent call a Seller Directly?

Sep 27, 2016

Agency

Question: When can a Buyer's Agent call a Seller Directly? 

Answer:
The restriction on contacting the clients of other agents comes from Article 16 of the Code of Ethics and Standards of Practice of the National Association of REALTORS®¨. Article 16 states that "REALTORS®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." In support of this Article, Standard of Practice 16-13 also states that "All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client's agent or broker, and not with the client . . ." This is generally known as the prohibition against "going behind the sign."

However, there are some exceptions to this rule that are contained in the Standards of Practice that are related to Article 16. The following are some examples of the exceptions to this rule and the Standards of Practice that created these exceptions.

Standard of Practice 16-13
The most common example is in the second portion of Standard of Practice 16-13 that states: "Éxcept with the consent of the client's agent or broker or where such dealings are initiated by the client." The Listing Agent can give the Buyer's Agent permission to contact the seller. This permission can be very broad or narrow, depending on the Listing Agents preference. One common example of narrow permission is when a Listing Agent states in MRIS that the cooperating agents should contact the seller prior to showing the property. I would remind everyone that this permission is limited to calling to arrange a time when the agent can show the property to the prospective buyers. This permission does not extend to having a discussion about the terms or conditions the seller is interested in seeing in the contract. One example of broad permission is when a Listing Agent states in the MRIS that all contract negotiations are to be conducted directly with the seller. In this example you could have a discussion about the terms or conditions that the seller is interested in seeing in the potential contract.

Standard of Practice 16-2
The exception allows agents to make general advertisements (mass mailings, telephone cold calls, etc) as long as the advertising is not targeted to individuals who have been identified by a real estate sign, multiple listing compilation or other information source that indicated that the person receiving the advertising was already represented by another agent.

Standard of Practice 16-3
You may contact the client of another broker to offer a different type of real estate service. For instance, if the other broker has an exclusive right to sell agreement, you may talk to the client about obtaining an exclusive right to lease or about an exclusive right to represent buyer agreement. However, you may not use information from MRIS compilation to identify and target the clients of other brokers.

Standard of Practice 16-4 and 16-5
You may not solicit a listing that is currently listed with another broker. If the other broker refuses to disclose the expiration date and type of agency agreement (open listing, exclusive right to sell, etc.) the agent has with the client, then a REALTOR® may contact the client to obtain this information. Please note that the exception only exists if the broker refuses to provide this information. If the information is provided the REALTOR® would not be allowed to contact the client directly. A broker may establish reasonable rules for releasing information about their listings that other brokers may need to follow (all requests must be in writing, must be made directly to the Sales Manager or Main office, etc.) and these rules do not constitute a refusal unless they were viewed as unreasonable.

Article 16 and the related Standards of Practice are the principles we need to keep in mind when we consider the answer to our questions. The Standards of Practice created a few exceptions to the general rule against contacting another Brokers client directly. However, none of them appear to authorize the Buyer Agent to contact the seller when a Listing Agent fails to respond.

My advice is to always first try the listing agent at the numbers listed in the system. When that fails I would recommend contacting the listing agent's firm to determine if there are alternative means of contacting the agent (other telephone numbers, email, fax machines, etc.). Also try to determine if another agent in the office is covering for the listing agent (this frequently occurs when the agent goes out of town). If that does not work I recommend contacting the listing agent's broker or sales manager or having your broker make one of those broker-to-broker telephone calls that tend to resolve these situations.

However, if all of these methods fail, I do not see any exceptions in the rules that allow the Buyer Agent to go behind the sign. Please believe me when I say I don't necessarily like this answer. There are days I wish we had an ethical requirement that agents return phone calls, but that is one Standard of Practice that has not been passed yet.
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  • Agency