Ethics Q&A/Texas Realtor

December 2001

Ethics Q&A

When is a bedroom not a bedroom? What is the definition of cooperation if we’re not going to share the money?

Q I brought a buyer client to another agent’s listing, which was described as having three bedrooms. When we arrived at the house, we found that the third "bedroom" was hardly suitable as a bedroom. It was tiny, had no closets or storage of any kind, and it had two entrances, one of which had no door. My client, who is only interested in houses with three real bedrooms, was upset with me for wasting his time. I have to say I can’t really blame him.

I’m sick and tired of agents and sellers who try to make a home sound like it can be anything that any potential buyer wants it to be. Do I or my clients have any recourse against agents who stretch the truth like this?

A There is no legal definition for what constitutes a bedroom, so it’s not as easy as saying the lack of a closet or the small size of the room disqualifies it from being described as such. While you and your client felt the room unworthy of bedroom status, some other potential buyer might see it as a perfect spot for a crib, dresser, and changing table. What you might consider "creative license" in describing a property is permissible to allow for honest differences of opinion. Even if you could prove a case legally, it would be hard for you or your client to establish any damages and probably would not be worth the time or cost of such an action.

Having said that, REALTORS® must be careful to abide by Article 12 of the Code of Ethics, which states that REALTORS® must present a "true picture in their advertising and representations to the public." If you or your client feel strongly that the agent did not present a true picture of the property, either of you could file an ethics complaint. A hearing panel would then make a determination about whether the description was fair.

A final consideration for any agent considering counting a closet as a bedroom is that his description may only serve to antagonize buyers and other agents—an outcome that no good agent would consciously choose.

Q I thought the whole point of cooperation was to share commissions. Now, my broker is telling me that’s not the case. I found the verbiage in Article 3: "The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker."

Why not? What does cooperation mean if not sharing the money?

A NAR spells it out this way: "The obligation to cooperate, established in Article 3 of the Code of Ethics, relates to a REALTOR®’s obligation to share information on listed property and to make property available to other brokers for showing to prospective purchasers when it is in the best interest of the seller. An offer of cooperation does not necessarily include an offer to compensate a cooperating broker. Compensation in a cooperative transaction results from either a blanket offer of subagency made through MLS or otherwise, or offers to compensate buyer agents, or, alternatively, individual offers made to subagents or to buyer agents, or other arrangements as negotiated between listing and cooperating brokers prior to the time an offer to purchase is produced."

Send your questions about ethics to texasrealtor@texasrealtors.com or fax to 512/370-2390. Not all questions received can be answered.

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