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VOL. 45 | NO. 23 | Friday, June 4, 2021

Doing the right thing isn’t always best thing for clients

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110 Doral Dr

There was a time when Realtors could trust one another to do what they said they would. But, then those pesky regulations of the Tennessee Real Estate Commission began to take precedent over courtesy and integrity, causing even more mayhem in a chaotic market.

Naivety and inexperience then allied themselves with overzealous buyers, eager sellers and real estate brokers drowning in the tidal wave that is the Midstate real estate market.

The Tennessee Real Estate Commission has mandated for years that all offers must be presented to the sellers, a statute endorsed by the National Association of Realtors, the governing body and trade association of the practicing real estate brokers. Greater Nashville Realtors fall under the purview of the NAR.

The reason for this stipulation is to protect the consumer, who in this case is the seller. Apparently some brokers were not making sellers aware of offers made to purchase properties.

With its members and leadership suffering under the pressures of an increasingly demanding battalion of buyers – coupled with an emaciated inventory of properties for sale – the NAR made overtures at damming the turbulent waters.

As is often the case with institutional intervention, NAR’s efforts proved inept if not counterproductive with its “clear cooperation rule,” which was neither clear nor cooperative. Supposedly leveling the playing field for smaller firms and bringing order into chaos, it merely fueled the flames of the real estate inferno.

In this case, President Ronald Reagan’s famous “I’m from the government and I am here to help” could be altered to “I’m here from NAR and I am here to help.” Reagan described his quotation as the most feared words in the English language. The NAR version applies today.

Those who have not experienced the carnage, the disappointment or the sadness associated with real estate today would have no idea of the significance of these ramblings. So, here is what happened:

Years ago, some real estate brokers began to post “Coming Soon” signs. Unlisted or not-yet-listed properties have always excited buyers.

The purpose of this practice was twofold in many, if not most, situations:

• It allowed the listing agent to sell the house without a cooperating buyers’ broker, hence more money for the listing agent.

• It allowed them to attract buyers who would ask to tour the property then not find it to their liking. Voila! A new prospective buyer for the listing agent.

Realtors, by decree, are sworn to be an ethical, cooperative lot and share their listings with each other. The Golden Rule serves as their collective credo. The Multiple Listing Service even took the whole philosophy further, forcing membership to be composed only of Realtors, as opposed to real estate brokers.

Realtors must abide by a Code of Ethics, lest they be punished.

With their world in turmoil, NAR took action and imposed a dictum that properties that were not ready for prime time could be listed but must include a date in which the listing would take place. Suddenly, Realtracs was funneling data to Redfin, Trulia, Zillow and the other scores of online real estate sites that these homes were coming soon.

Buyers flocked to the homes, and Realtors began to define the rules of engagement. For example, the listing agent might state that showings begin June 6, with offers due by 5 p.m. June 11, reviewed June 12 and buyers notified shortly thereafter.

With so many buyers floating around who have lost numerous homes, some agents have their clients write a “make me move” offer with a deadline for acceptance days before the official submission date, knowing that the regulation states that all offers must be presented.

At that point, the listing agent must present the offer, and the sellers have the right to accept, even if it breaks the rules of engagement that have been published. If the owner accepts, all of those who played by the rules lose.

Not very clear, certainly not cooperative.

Perhaps NAR should enforce a “clear conscience” rule stating listing agents must have a clear conscience after the sale closed.

As is often the case, Christie Wilson, the owner/broker of the heralded Wilson Group, has the answer. “Those Realtors who understand the Code of Ethics, possess a strong business acumen, are protective of their reputations and have a strong moral compass have learned that the best business practice is to perform in a manner that is most beneficial to their clients,” she says.

“It is most advantageous to their clients – the homeowners – to expose the house to the market for the time period originally designated,” she adds.

It has been her experience that if a buyer submits an offer and requires acceptance within eight hours, they will later find a way to terminate the contract. Wilson says the goal is to get the home sold for the most money with the best conditions.

Knowing the market will dictate the price, Wilson adds, more exposure is better.

One of the stars of the Wilson Group, Abby Murphy, recently proved the point when she sold a home on the Temple Hills golf course at 110 Doral Drive. Listed for $214 per square foot, the house sold for $258 per square foot. The price-per-square-foot calculation has officially gone the way of the dinosaur.

Listed for $675,00, the house sold for $815,000 as Murphy stuck by her guns.

There is a tale of a person who had similar guidelines and sold earlier than the imposed deadline for $100,000 more than list. The listing agent responded to complaints by saying there was deadline and the owner did not want to risk losing the deal.

To be fair, $100,000 more than list price is enticing.

In this case, however, several agents have stated they were holding offers for much more than $100 more than list, waiting to submit their offers closer to the deadline so their offers would not be shopped by the listing agent.

Many create rules, then break them. It’s like killing a mockingbird. And Atticus Finch is nowhere to be found.

Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty, LLC and can be reached at richard@richardcourtney.com.

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