I came across an interesting “Letter to the Editor” in yesterday’s Star Phoenix which I wanted to touch on. The letter was submitted by Maureen Shebelski, a Saskatoon resident and mother.
Maureen’s decrial of the current state of the Saskatoon real estate market is a testimonial to her social conscience and it’s obvious that her concerns are sincere at every level. She points to the challenges and consequences which are inevitable in a market that experiences such rapid and significant change. Rising property taxes and insurance rates, increasing levels of debt, and uncertainty about the future are all things that are on Maureen’s mind right now.
I share many of the concerns which she expressed. I am also a parent, and coincidentally I have one daughter and one son, both young adults, so I’ve spent lots of time considering how this “new Saskatoon” will affect them. I’m also keenly aware that there are many residents in this fine city who will face challenges that will dwarf those that my own kids might experience as a result of this “boom.”
Maureen also takes the opportunity to place a little blame for what’s going on, starting with Premier Lorne Calvert and wrapping up with the real estate industry. She says, “I also blame the real estate industry and its new method of taking bids on houses, instead of taking offers. When my father was in real estate, there were some ethics involved. I don’t see that now.”
This attempt to “blame the real estate industry” and suggest that there is something unethical about “the new method of taking bids” would be easy enough for most to agree with, particularly those who are facing the challenge of buying a home in this market. Ultimately, it demonstrates a lack of understanding as to the role of a “seller’s agent” in the real estate transaction.
Since it is “ethics” which are questioned here, let’s take a look at some of the ethical guidelines which may apply from the Canadian Real Estate Association’s Code of Ethics which all REALTORS® are sworn to uphold.
Article 3 – Primary Duty to Client – A REALTOR® shall protect and promote the interests of his or her client. This primary obligation does not relieve the REALTOR® of the responsibility of dealing fairly with all parties to a transaction (Also appears in provincial statutory legislation in the Saskatchewan Real Estate Commission Bylaws, section 702).
Article 12 – A REALTOR® shall render a skilled and conscientious service, in conformity with the standards of competence which are reasonably expected in the specific real estate disciplines in which the REALTOR® engages.
Article 18 – The business of a REALTOR® shall be conducted in strict accordance with all statutory and regulatory requirements.
Ethics and statutory regulation aside, we have volumes of agency law decisions that define an agent’s obligations to his or her client. Agency law provides a history of expectations that are considered reasonable and holds an agent accountable and liable for damages which result from a failure to act as a fiduciary to the person or persons who have hired them. In its simplest form, the agency relationship is founded on obedience, confidentiality, competence, disclosure, accountability, trust and loyalty.
Finally, the listing agreement used in Saskatchewan binds a seller’s agent to the following promises to his or her client;
- obey the seller’s instructions on the Exclusive Seller’s Brokerage Contract and all lawful instructions of the seller;
- represent the seller’s best interests;
- fully disclose known facts which might influence the seller’s decision;
- maintain the confidentiality of personal and financial information discussed with the seller even after the Exclusive Seller’s Brokerage Contract expires;
- safeguard the seller’s documents and money; and
- exercise reasonable care and diligence.
I expect that most people do understand that multiple offers on a property most likely places the seller in the best possible position to negotiate a favorable price and terms. Given that are bound by a Code of Ethics, statutory law, agency law and our promise in writing to act with complete loyalty to the seller, how is it that we are viewed as “unethical” for making as many prospective buyers as possible aware that a client’s home is for sale? I would suggest that failing to make every effort to deliver the best result for a client would be unethical and unlawful.
Discussions which I’ve had with Al Jacobsen, Registrar of the Saskatchewan Real Estate Commission and with Randy Katzman, a local real estate lawyer suggest that agents who fail to provide adequate exposure for a client’s property could be subject to both prosecution and civil litigation with potential consequences including large fines, license suspension or cancellation, and damages which might result from that negligence. Personally, I’m not much into any of that.
Every time that a seller’s home is sold without a reasonable level of exposure to the market, a betrayal is committed. Every time an agent brings a seller’s property to the market and provides buyers with reasonable access, a promise is fulfilled. Seller’s benefit and so does the community of Saskatoon real estate buyers.
Please don’t call the Saskatoon real estate community unethical for doing right by its sellers. They pay us a hefty chunk of change for representation and they deserve to get exactly what they’ve paid for; obedience, confidentiality, competence, disclosure, accountability, trust, and loyalty. Acting as one’s agent is an honor and a privilege that should be taken seriously.
I’m always happy to answer your Saskatoon real estate questions.
Royal LePage Vidorra