Realtor® Keith represented two buyers, Bobby and Betty, and showed them four houses. Betty then asked to see one of the properties a second time, then a third, then a fourth. Bobby and Betty seemed as if they were on the cusp of committing to the house they visited over and over but told Keith they’d like to “sleep on it.”
When Keith didn’t receive a call the next day, he called Bobby and Betty,
Bobby told Keith that he was a bit hesitant on the price. “There’s a rumor that my company will have some executive transfers that could impact me this year,” he said. “I’m hesitant to commit that much money to a house only to lose some if I have to sell within 12 months.”
Realtor Keith tried to reassure the prospect by phone but couldn’t get Bobby to commit. Keith then dictated a letter stating that the house was an exceptional bargain at the asking price and “our office guarantees to get your money out of it for you any time over the next year if you should need to sell.”
Bobby was convinced, and he came in with Betty later that day to sign the contract.
Six months later, Bobby called Keith and said he wanted to sell that same house. He was, indeed, being transferred, and he needed to get his equity out of the house so he could afford another home in his new community.
Keith listed the house at the same price Bobby and Betty had paid for it. After a month, however, there had been no offers, and Bobby was getting anxious because the transfer was at hand. He then reminded Keith that his office had guaranteed he would get his money out of the house within the year.
Keith explained that the market had changed over the past six months – that it had become much less active and that Bobby and Betty might have to reduce their price by $10,000 or $15,000 to attract a buyer.
Bobby then filed a complaint with the local Realtor association. He charged Keith with misrepresentation, exaggeration and failure to make good on a commitment. After examining the complaint, the Grievance Committee referred it to the Professional Standards Committee for a hearing.
In response to questioning by the Hearing Panel, Keith agreed that he had written the letter to Bobby and Betty in good faith at the time the letter was written because he’d been certain at the time that he could obtain a price for the property that would ensure Bobby and Betty “got their money out of the house.”
Kevin did not control the local real estate market, and he had no way of knowing that it would slow over the following six months, he said. And while he regretted that the home would likely sell for less than Bobby and Betty had paid, the fault lay with the market and not Kevin.
The Hearing Panel reminded Keith that the market wasn’t the issue, nor his opinion of the market when Bobby and Betty first bought the house. The pertinent issue was Keith’s written “guarantee” to Bobby and Keith’s current failure to make good on his written commitment.
The Hearing Panel’s conclusion: Keith had engaged in misrepresentation and was in violation of Article 2 of the Realtors Code of Ethics.