Code of Ethics standards on multiple
offers, demographic information
change ... effective Jan. 1
By Peg Ritenour, Vice President Legal Services
Ohio Association of REALTORS® In October, NAR's Board of Directors voted to amend three of the Standards of Practice that clarify what is required of REALTORS® to comply with the NAR Code of Ethics. Two of these changes involve the handling of offers and the third deals with inquiries involving emographic information. All of these changes become effective Jan. 1. Probably the most significant change involves Standard of Practice 1-13. This Standard sets forth a REALTOR®'s duty to make certain disclosures when a REALTOR® enters into an agreement to represent a buyer. Among these is the duty to disclose the brokerage's policy regarding cooperation and compensation and the potential to act as a dual agent.
Effective Jan. 1, buyers' agents will also be required to advise their clients of the possibility that the seller, or listing agency, may not treat the existence, terms or conditions of their offer as confidential. Such confidentiality is not required of sellers under Ohio law and would only be required of a listing agent if that listing agent also represented the buyer and was functioning as a dual agent. If the listing agent represents only the seller, that listing agent would only owe a duty of confidentiality to the seller and would owe no such duty to a buyer. This would mean that a seller could direct their listing agent to disclose the existence of an offer and the terms or conditions contained in that offer to competing buyers. Such an instruction would have to be followed by the listing agent because of the listing agent's fiduciary duty to obey the lawful instructions of their client. Unfortunately most buyers are under the misconception that the terms of any offer to purchase they make are confidential and will not be revealed to other buyers. The purpose of the amendment to Standards of Practice 1-13 is to assure that buyers' agents are advising their clients of this fact. Such advice can be done verbally, but REALTORS® may want to consider doing so in writing. Further, buyers who want o make sure their offers are not revealed to others or "shopped" could negotiate a confidentiality agreement with the seller. This would need to be done in advance of submitting an offer. The second amendment, effective Jan. 1, also involves the handling of multiple offers. Currently Standard of Practice 1- 15 requires a listing broker to disclose the existence of other offers when asked but only if the seller approves such disclosure. The new language added to this section now further requires the listing agent to disclose whether the other offer(s) were obtained by the listing agent, another agent in his/her brokerage or by a cooperating REALTOR®. The rationale for this disclosure is based upon the practice some REALTORS® engage in of reducing their commission on offers they produce to make them more attractive to the seller. The new provision is intended to help cooperating REALTORS® better determine the ikelihood of this occurring when there are competing offers. The final change is to Standards of Practice 11-1, prohibits REALTORS® from volunteering information regarding the racial, ethnic, or religious composition or engaging in any activity that may result in panic selling. The amendment clarifies that this provision applies to sale or lease of residential property and that REALTORS® can provide other demographic information that does not involve the racial, ethnic or religious composition of the area. As stated above, these changes become effective Jan. 1 and apply to all REALTORS®. The Standards of Practice are part of the NAR Code of Ethics that all REALTORS® agree to follow when they join their Local Board/Association. The Code of Ethics is enforced through the Professional Standards process at the local level. | 
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