Welcome back to my series on the Realtor Code of Ethics, Articles 4 and 5!
The previous article was about Cooperating with Other Brokers.
Articles 4 and 5 concern disclosing an agent’s ownership interest in a property for sale, or relationship with professional services during the transaction.
Article 4 – Disclosing Whether the Agent is a Buyer or Seller
If I were to sell my own home, or investment property, or anything, I would have to disclose that I am an agent to the buyer in writing. Or if buying a home, I would likewise have to disclose to the seller that I am a licensed Realtor®.
Not only must I do this if I am the buyer or seller, but if I am representing a family member or my company, I must do the same.
Normally, an agent selling their own home or a family member’s home will list in the agent to agent remarks on the MLS that the seller is a licensed Realtor®, and that is sufficient to meet the requirement.
For example, we have several agents who work as residential real estate agents by day and as investors by night (not literally, mind you). Even though their investor business a completely separate business from their real estate agent business, and even though they keep them meticulously separate, they are still a licensed Realtor® and must disclose that fact to the other parties in their investment business transactions.
Article 5 – Disclosing Whether the Agent is Affiliated with Other Professional Services
Agents must disclose any ownership interest in other businesses related to the real estate transaction as well.
An example – I might be a real estate broker, and maybe also own a title company. If I recommend that we use my title company, I must disclose to all the parties – and they accept it – that we are using a title company I happen to own. Or maybe I’m also a licensed inspector, or loan originator, or surveyor… who knows. But if I am doing anything else that I am allowed to do separate from my real estate license, then it must be disclosed!
So, a short couple of paragraphs. Next are Articles 6 and 7 – disclosing compensation.
