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Deception Is Not Our Code

The following story intentionally leaves out details of the parties involved due to the fact that my knowledge of the story is indirect and thus I don’t know all the facts.

Today I heard a story about an agent & seller that reduced a property’s price by more than 50% in an effort to drum up tons of buyer interest and get a crush of offers via sealed bid due in a couple weeks.  The agent telling the story to me said at least 3 agents in his office had buyers inquire on this property and the overall reaction was frustration/anger as apparently there was zero intent by the parties involved for an offer to be accepted anywhere near the unrealistically low asking price.  Effectively the agent and seller were gaming the system.

realtor logo 150x150 Deception Is Not Our Code

The REALTOR Code of Ethics sets forth the minimum standards by which members of the National Association of REALTORS must adhere to, which in many cases go well beyond the standards required by state real estate licensing requirements.

In this case, I believe there could be violations of Articles 1, 2 and 12 and also potentially violations of state law as well, all stemming from the fact that the price at which the home is advertised for sale is not in fact a price the seller will accept.  This is therefore dishonest and a misrepresentation of the situation.  If the property was advertised as an auction property, and thus not advertised at as for sale at a specific price, then that would be a different story.  Unfortunately that is not the case in this situation.

This kind of gaming of the system hurts the people who are directly connected to the situation and also affects the integrity of the system – consumer and agent trust in the cooperative MLS system is based on the accuracy of the information presented. Egregious acts like this can have a lasting effect on the perception of REALTORS by the public.

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3 comments
Craig Kamman
Craig Kamman

Interesting... I personally would not chance this as an Agent or a Seller - the risk/reward doesn't seem worth it.. but that is me... How would listing homes on the MLS for public auction be different than this scenario? There is allowance for auctions, or even the HUD sealed bid process right? How does this case differ from Auctions or HUD's sealed bid process?

Aaron Dickinson
Aaron Dickinson

I believe the difference is in the way the property is marketed and the intent of the seller. If a home is listed at a set price and terms but the seller will not sell it at that price then the listing is misleading. The equivalent would be advertising gas for $3 but saying you will only sell it at $5. A property listed as an auction by its very nature is advertising that the price will be set through competitive bidding. I still see HUD's sealed bid process as a listing in that they would sell it at the price and terms listed if higher bids are not received.

Zach Skidmore
Zach Skidmore

Thanks for this great post. As a REALTOR in Center City Philadelphia I can appreciate the content of this post. It's too bad that some people in our business will practice this way.

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TwinCitiesRealEstateBlog.com is not a Multiple Listing Service MLS, nor does it offer MLS access.
This website is a service of Aaron Dickinson of Edina Realty, a broker Participant of the Regional Multiple Listing Service of Minnesota, Inc.