Working Expired and Withdrawn Listings Legally and Ethically #in

By
Real Estate Broker Owner with Pareto Realty TN #251071

 

First . . . My disclaimer . . . I am a Real Estate Principal Broker of a firm I solely own (Pareto Realty). If you’re a REALTOR and you are not affiliated with Pareto Realty or Pareto Reserve, I am not YOUR Broker so if you want clarification on any of the below, be sure to consult with YOUR Principal Broker. While I’m at it . . . I’m not an attorney either . . . This post should not be considered to be “Legal Advice” – Contact an attorney with any tort related questions

Every so often, a listing agent will intentionally allow a listing to expire . . . or withdraw it for “Strategic Reasons” with full permission from the client (Owner of the property). Reasons might be to cease showings while repairs or staging happens so as to re-list later . . . or the Owner may have had a family event (Birth, Death, etc) that necessitates a Break from showings.

Just because the listing expires or is withdrawn from the Multiple Listing System does not necessarily in and of itself mean that there is no longer a contractual client and/or close personal relationship between the Seller and the Listing Agent.

Some Real Estate Professionals “work expired and withdrawn listings” which means that they pay attention to the housing inventory and contact the owners of houses which fall out of the MLS. If done legally and tactfully, this is not a bad way to find new business, .

After all –  if the listing expires (and so does the listing agreement), the owner may very well be in the market for a new agent . . . there’s nothing wrong with standing up to be noticed.

My caveat is this: as agents go about this practice of contacting expired and withdrawn listings, some become a tad overzealous and risk stepping over legal and ethical boundaries . . . 

As we ask Buyers at Open Houses or on sign calls “Are you current working with an agent, and have you signed a representation agreement?“, REALTORS in pursuit of Expired or Withdrawn Listings (Sellers) should verify that there is no existing Exclusive Right to Sell Listing agreement before they launch into any level of solicitation for the listing of the house.

Miss this step as you tackle Withdrawn/Expired listings, and you risk committing what is known in the legal world as Tortious Interference (See this defined below). Ignorance is not a good defense . . . All Real Estate Professionals should know to ask this question as required by law and the Code of Ethics.

Furthermore, some agents may slip into violation of the Code of Ethics and Standards of Practice of the National Association of REALTORS (Click the link to view the entire code) by stepping out of bounds with off-hand, disparaging comments about the initial listing agent.

I did a little digging into our code . . . Specifically:

  •  Article 15 
    REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.
  • Article 16 
    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.

Then I dug into Google for information on Tort law and found . . .

From Wiki:

“Tortious interference, also known as intentional interference with contractual relations, in the common law of tort, occurs when a person intentionally damages the plaintiff‘s contractual or other business relationships . . .

Tortious interference with contract rights can occur where the tortfeasor convinces a party to breach the contract against the plaintiff, or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff from receiving the performance promised. The classic example of this tort occurs when one party induces another party to breach a contract with a third party, in circumstances where the first party has no privilege to act as it does and acts with knowledge of the existence of the contract. Such conduct is termed tortious inducement of breach of contract.

So . . . By all means, work expired and withdrawn listings for new listings . . .

Just be sure:

  1. that you can legally solicit the business
  2. to take the high road with anything you say about the prior REALTOR
This is as much to protect reputation as it is to keep folks on the right side of legal and ethical boundaries . . . Breaking the rules and trash mouthing other real estate professionals actually damages the perpetrator’s reputation more than anyone else.
Just sayin’
Best,
b
Posted by

Barry Owen

Founder
Principal Broker
Pareto Realty
Nashville, TN

615.502.2080
www.paretorealty.co  
Call me: 615-568-2123
email me: barryo@comcast.net

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Topic:
ActiveRain Community
Location:
Tennessee Davidson County Nashville
Groups:
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Posts to Localism
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Tags:
tortious interference
realtor code of ethics
expired listing
article 16
article 15
real estate professionals
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Rainer
343,344
Bill Reddington
Destin Florida Real Estate
Re/max Southern Realty

Working expireds is an interesting challenge. Ethics is an interesting word anymore it seems. Thw word is used alot but not sure all Realtors know what it means.

January 27, 2012 11:07 AM
Rainmaker
159,876
Stephen Proski
Scottsdale Homes For Sale
RE/MAX Scottsdale, AZ Real Estate

Barry great advise, it is a good reminder to us all not to talk bad about a fellow Realtor.  Chasing temporary off market is not sound business practices, but once a listing has expired, it should be open to anyone.

January 27, 2012 11:12 AM
Rainer
130,312
Laura Murray
Search Montgomery Co., MD for homes www.MDRealEstateOnline.com
Weichert

This is a good warning to agents.  I think we all make the assumption that expired are free game, but as you point out that is not always the case.

July 12, 2012 10:59 AM
Rainer
11,421
Michelle Vickers
Prompt Professional Proactive
HER Realtors Worthington 614-353-3698

Yes lets not trash talk other agents because really it just makes us look unprofessional. Also, if contacting an expired or withdrawn by phone we also need to consider the do not call list when we make the call. One way to avoid breaking the rule of the do not call list is to simply ask if you can come see their property as you are not "selling" them anything, just asking to view the property....this is okay in my part of the country, what about yours?

July 02, 2013 04:50 PM
Rainmaker
58,603
Kaye Swain
Kaye cares for you and your real estate needs

Excellent points, all. And I hope y'all aren't freezing too bad now. We've been watching the weather closely since we used to live in Kentucky and have friends there. Definitely hot chocoloate weather for you.  Stay warm!

January 24, 2014 01:29 PM
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Rainmaker
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Barry Owen

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Additional Information

Stream of consciousness commentary on the real estate industry from the perspective of a Principal Real Estate Broker and Founder of Pareto REalty, LLC in Middlle Tennessee - Also a Career Development Coach with vast Organizational Development/Transformation training and experience - in the industry since 1993