risking your money

Risking Your MoneyRisking Your Money

8 Hour 8 Hour Mandatory Continuing EducationMandatory Continuing Education

08-00-120-753908-00-120-7539

By Peggy Santmyer

LEARNING OBJECTIVESLEARNING OBJECTIVES

By participating in this class the By participating in this class the student will explore some of the risk student will explore some of the risk involved in protecting their involved in protecting their commission.commission.

Using group activities and lecture the Using group activities and lecture the class will explore Procuring Cause class will explore Procuring Cause issues, MLS and TREC fines.issues, MLS and TREC fines.

The Students will create risk The Students will create risk management tools to share with the management tools to share with the class.class.

Group WorkshopGroup Workshop

In your group discuss the In your group discuss the

true and false questions true and false questions

in the Pre-Assessment in the Pre-Assessment Evaluation on pages 6 and 7Evaluation on pages 6 and 7

Someone Else Wants the Someone Else Wants the CommissionCommission

Has It Ever Happened to You??Has It Ever Happened to You??

Another AgentAnother Agent

A BuilderA Builder

A BuyerA Buyer

Black's Law Dictionary, Fifth Black's Law Dictionary, Fifth Edition, defines procuring cause as Edition, defines procuring cause as

follows: follows:

The proximate cause; the cause originating a The proximate cause; the cause originating a series of events, which, without break in their series of events, which, without break in their continuity, result in the accomplishment of continuity, result in the accomplishment of the prime object. the prime object.

The inducing cause; the direct or proximate The inducing cause; the direct or proximate cause. Substantially synonymous with cause. Substantially synonymous with 'efficient cause'."'efficient cause'."

page 8page 8

OUR NAR MANUAL OUR NAR MANUAL

The broker will be regarded as the The broker will be regarded as the 'procuring cause' of a sale, so as to be 'procuring cause' of a sale, so as to be entitled to commission, if his efforts are entitled to commission, if his efforts are the foundation on which the the foundation on which the negotiations resulting in a sale are negotiations resulting in a sale are begun.begun.

PROCURING CAUSEPROCURING CAUSE

A cause originating a series of events A cause originating a series of events which which without break in their continuitywithout break in their continuity result in the accomplishment of prime result in the accomplishment of prime objective.objective.

The broker who produces a purchaser The broker who produces a purchaser ready, willing and able to buy real ready, willing and able to buy real estate on the owner's terms.estate on the owner's terms.

There is no typical real estate There is no typical real estate transaction!transaction!

Therefore there are no pre-determined Therefore there are no pre-determined rules of procuring cause….rules of procuring cause….

A Board of REALTORSA Board of REALTORS® or MLS rules ® or MLS rules may not establish pre-determined rulesmay not establish pre-determined rules

Procuring cause is determined by an Procuring cause is determined by an Arbitration Hearing Panel based on Arbitration Hearing Panel based on ascertainable factsascertainable facts

Page 9Page 9

NAR Code of EthicsNAR Code of EthicsArticle 17Article 17In the event of contractual disputes or specific In the event of contractual disputes or specific

non-contractual disputes as defined by non-contractual disputes as defined by Standard of Practice 17-4 between RealtorsStandard of Practice 17-4 between Realtors associated with different firms, arising out of associated with different firms, arising out of their relationship as Realtorstheir relationship as Realtors, the Realtors, the Realtors shall submit the dispute to arbitration in shall submit the dispute to arbitration in accordance with the regulations of their accordance with the regulations of their Board or Boards rather than litigate the Board or Boards rather than litigate the matter.matter.

Page 10Page 10

Specific Non-Contractual DisputesSpecific Non-Contractual Disputes

If a Co-op Broker has already been paid If a Co-op Broker has already been paid the commission by the Listing Broker, the commission by the Listing Broker, Seller or Buyer and then another Co-op Seller or Buyer and then another Co-op Broker claims to be the procuring Broker claims to be the procuring cause the complainant may name the cause the complainant may name the first Co-Op Broker as the respondent first Co-Op Broker as the respondent rather than the Listing Broker.rather than the Listing Broker.

Specific Non-Contractual DisputesSpecific Non-Contractual Disputes

If the complainant names the Listing If the complainant names the Listing Broker as the respondent the Listing Broker as the respondent the Listing Broker may name the first Co-op Broker may name the first Co-op Broker as a 3Broker as a 3rdrd party respondent. party respondent.

The request for arbitrationThe request for arbitration

It is important that the agent that believes It is important that the agent that believes he/she has been wronged does not take any he/she has been wronged does not take any action that would interfere with the action that would interfere with the transaction. Often it is necessary to allow transaction. Often it is necessary to allow the transaction to close before taking the the transaction to close before taking the next step.next step.

Must be filed with the Board within 180 days Must be filed with the Board within 180 days after closing, or after the arbitrable matter after closing, or after the arbitrable matter could have been known. could have been known.

Grievance CommitteeGrievance Committee

The request is reviewed by the The request is reviewed by the Grievance Committee first to be sure it Grievance Committee first to be sure it is filed properly. is filed properly.

The Board can decline to arbitrate if The Board can decline to arbitrate if they feel the situation is too complex or they feel the situation is too complex or the amounts of money too large. the amounts of money too large.

If the Board declines, the REALTORS® If the Board declines, the REALTORS® are free to pursue the matter legally.are free to pursue the matter legally.

Arbitration Cases Between Two Arbitration Cases Between Two Different FirmsDifferent Firms

Will be between the RealtorWill be between the Realtor principals of principals of the firms. the firms.

Realtor-Associates of a firm must be joined Realtor-Associates of a firm must be joined by the principal of their company to request by the principal of their company to request arbitration. arbitration.

Realtor-Associates have a vested financial Realtor-Associates have a vested financial interest in the outcome and have the right to interest in the outcome and have the right to be present throughout the proceedings and be present throughout the proceedings and to participate but are not considered to be to participate but are not considered to be parties.parties.

The Contractual Agreement The Contractual Agreement Between the BrokersBetween the Brokers

Through MLS, Listing Brokers make Through MLS, Listing Brokers make unconditional offers of compensation unconditional offers of compensation to Selling Brokers (SAC or BAC) that to Selling Brokers (SAC or BAC) that are the procuring cause of the sale or are the procuring cause of the sale or lease. lease.

SAC/BACSAC/BAC forms a forms a Contractual Contractual RelationshipRelationship

The offer of the Listing Broker in MLS The offer of the Listing Broker in MLS (SAC/BAC) to cooperate and (SAC/BAC) to cooperate and compensate is a unilateral offer. compensate is a unilateral offer.

Acceptance only occurs through the Acceptance only occurs through the performance of a procuring cause of a performance of a procuring cause of a successful transaction.successful transaction.

Four Contracts that may be presentFour Contracts that may be present in one Transaction in one Transaction page 11page 11

1.1. Listing Agreement Listing Agreement between Seller & Listing Brokerbetween Seller & Listing Broker 2. Buyer Representation Agreements2. Buyer Representation Agreements between Buyer and Buyer’ Brokerbetween Buyer and Buyer’ Broker 3. Purchase Agreement/Contract3. Purchase Agreement/Contract between Buyer & Sellerbetween Buyer & Seller 4. Offer to Cooperate and Compensate the 4. Offer to Cooperate and Compensate the

Procuring Cause of the Sale (through MLS) Procuring Cause of the Sale (through MLS) between Listing Broker & Procuring Cause between Listing Broker & Procuring Cause Broker (SAC and/or BAC)Broker (SAC and/or BAC)

Boards and Associations of Boards and Associations of REALTORSREALTORS

Provide arbitration to resolve Provide arbitration to resolve contractualcontractual issues and questionsissues and questions and specific non- and specific non-contractual issues and questions that contractual issues and questions that arise between members, members and arise between members, members and their clients, and in some cases, their clients, and in some cases, between parties to a transaction that between parties to a transaction that was brought about through the efforts was brought about through the efforts of REALTORSof REALTORS..

Page 12Page 12

Split awards are the exceptionSplit awards are the exception

Awards are generally for the full Awards are generally for the full amount in questionamount in question

In exceptional cases awards may be In exceptional cases awards may be split between the parties. split between the parties.

Split awards should only be used when Split awards should only be used when the panel determines that the the panel determines that the transaction would have only resulted transaction would have only resulted through the combined efforts of both through the combined efforts of both parties.parties.

Article 16 of the Article 16 of the NAR Code of EthicsNAR Code of Ethics

REALTORS shall not engage in any REALTORS shall not engage in any practice or take any action inconsistent practice or take any action inconsistent with the agency or other exclusive with the agency or other exclusive relationship recognized by law that relationship recognized by law that other REALTORSother REALTORS have with clients. have with clients.

Page 12Page 12

The Code of Ethics Must Not Be The Code of Ethics Must Not Be Used as a Club or a LeverUsed as a Club or a Lever

The Board must distinguish between The Board must distinguish between controversies which are properly the controversies which are properly the subject of arbitration and controversies subject of arbitration and controversies involving the Code of Ethicsinvolving the Code of Ethics

For complaints involving both charges For complaints involving both charges of unethical conduct and request for of unethical conduct and request for arbitration, the dual complaint must be arbitration, the dual complaint must be severed and arbitration heard prior to severed and arbitration heard prior to hearing any ethics charges.hearing any ethics charges.

Page 13Page 13

Factors for Consideration by Factors for Consideration by Arbitration Hearing PanelsArbitration Hearing Panels

Factor #1. Factor #1. No predetermined rule of entitlementNo predetermined rule of entitlement

Procuring cause shall be the primary Procuring cause shall be the primary determining factor in entitlement to determining factor in entitlement to compensation. compensation.

Agency relationships, in and of themselves, Agency relationships, in and of themselves, do not determine entitlement to do not determine entitlement to compensation. compensation.

The agency relationship with the client and The agency relationship with the client and entitlement to compensation are separate entitlement to compensation are separate issues. issues. Page 15Page 15

Factor #2.Factor #2.

Arbitrability and appropriate partiesArbitrability and appropriate parties

Was there ever a contract between the Brokers?Was there ever a contract between the Brokers?

Are the proper parties named?Are the proper parties named?

Factor #3. Factor #3.

Relevance and admissibilityRelevance and admissibility


Communication and contact Communication and contact

abandonment and estrangementabandonment and estrangement

Did the Broker make reasonable efforts to develop Did the Broker make reasonable efforts to develop and maintain a relationship?and maintain a relationship?

Did the Broker abandon the purchaser?Did the Broker abandon the purchaser? Did the Broker do something or not do something Did the Broker do something or not do something

that caused the Buyer to become estranged from the that caused the Buyer to become estranged from the Broker?Broker?

Page 16Page 16

More about Abandonment More about Abandonment and Estrangementand Estrangement

If a Buyer has became estranged from the If a Buyer has became estranged from the first Broker or feels abandoned by the first first Broker or feels abandoned by the first Broker Broker

The Arbitration Hearing Panel may want to The Arbitration Hearing Panel may want to consider whether such conduct caused a consider whether such conduct caused a break in the series of events leading to the break in the series of events leading to the transactiontransaction

And whether the successful transaction was And whether the successful transaction was actually brought about through the initiation actually brought about through the initiation of a separate, subsequent series of events by of a separate, subsequent series of events by the second cooperating broker.the second cooperating broker.


Conformity with state lawConformity with state law

Factor #6.Factor #6. Consideration of the entire course Consideration of the entire course

of eventsof events

Continuity and Continuity and breaks in continuity -breaks in continuity -

abandonment and estrangementabandonment and estrangement What was the length of time between What was the length of time between

the broker’s efforts and the final sales the broker’s efforts and the final sales agreement?agreement?

Did the original introduction of the Did the original introduction of the purchaser or tenant to the property purchaser or tenant to the property start an uninterrupted series of events start an uninterrupted series of events leading to the sale or lease?leading to the sale or lease?

If there was an interruption or break in the original If there was an interruption or break in the original series of events, how was it caused and by whom? series of events, how was it caused and by whom?

Did the broker who made the initial introduction to Did the broker who made the initial introduction to the property maintain contact with the purchaser or the property maintain contact with the purchaser or tenant, or could the broker’s inaction have tenant, or could the broker’s inaction have reasonably been viewed by the buyer or tenant as a reasonably been viewed by the buyer or tenant as a withdrawal from the transaction?withdrawal from the transaction?

Was the entry of any cooperating broker into the Was the entry of any cooperating broker into the transaction an intrusion into an existing relationship transaction an intrusion into an existing relationship between the purchaser and another broker, or was it between the purchaser and another broker, or was it the result of abandonment or estrangement of the the result of abandonment or estrangement of the purchaser, or at the request of the purchaser?purchaser, or at the request of the purchaser?

Procuring Cause WorkshopProcuring Cause Workshop

Pages 19-21Pages 19-21

Remember to ONLY answer the Remember to ONLY answer the question that is asked!question that is asked!

Avoiding DisputesAvoiding Disputes

Before entering into a buyer Before entering into a buyer representation agreement, determine representation agreement, determine whether the buyer is subject to a prior whether the buyer is subject to a prior agreement. agreement.

Be with your buyer client when they are Be with your buyer client when they are looking at property. looking at property.

If the property is not in MLS, have a If the property is not in MLS, have a separate written agreement in regard to separate written agreement in regard to compensation. compensation. Page 22Page 22


If either a buyer or a seller are under If either a buyer or a seller are under contract with another Broker and tell contract with another Broker and tell you they are unhappy, direct them back you they are unhappy, direct them back to their Broker to try to resolve the to their Broker to try to resolve the problem.problem.

If the buyer indicates they have already If the buyer indicates they have already looked at a property ask questions. looked at a property ask questions. They did introduce this buyer to this They did introduce this buyer to this property.property.


Realize that showing a buyer a home, Realize that showing a buyer a home, during an open house, may not during an open house, may not determine procuring cause.determine procuring cause.

Present all offers and counter offers Present all offers and counter offers promptly.promptly.

Keep good records, notes, copies of Keep good records, notes, copies of other communications.other communications.


Return calls promptly.Return calls promptly. If a dispute arises try to find a win-win If a dispute arises try to find a win-win

solution.solution.

Remember that the existence of Remember that the existence of an agency relationship does an agency relationship does not, by itself, determine not, by itself, determine procuring cause.procuring cause.

Other informationOther information

Is there any other information that would Is there any other information that would assist the hearing panel in having a full, clear assist the hearing panel in having a full, clear understanding of the transaction giving rise understanding of the transaction giving rise to the arbitration request or in reaching a fair to the arbitration request or in reaching a fair and equitable resolution of the matter?and equitable resolution of the matter?

The objective of the panel is to carefully and The objective of the panel is to carefully and impartially weigh and analyze the whole impartially weigh and analyze the whole course of conduct of the parties and to course of conduct of the parties and to render a reasoned peer judgment.render a reasoned peer judgment.

Mediation as a Board ServiceMediation as a Board Service

Before going to arbitration the Before going to arbitration the parties will be asked if they would parties will be asked if they would like to try to resolve the problem like to try to resolve the problem in mediation.in mediation.

Differences Differences between Arbitration and Mediationbetween Arbitration and Mediation

In Mediation the parties decide how to In Mediation the parties decide how to work it out. In arbitration the panel work it out. In arbitration the panel decides.decides.

Split awards are more common in Split awards are more common in Mediation.Mediation.

No big winner, no big loser in No big winner, no big loser in Mediation.Mediation.

A kinder, friendlier way to settle the A kinder, friendlier way to settle the problemproblem

What do You Know What do You Know About MLS Rules? About MLS Rules?

In your group discuss the true and In your group discuss the true and false questions in the Pre-false questions in the Pre-Assessment Evaluation on pages Assessment Evaluation on pages 22 and 2322 and 23

MLS Providers:MLS Providers:

NTREIS is a regional MLS NTREIS is a regional MLS

NTREIS is owned by participating NTREIS is owned by participating associations in the North Texas associations in the North Texas area. area.

Most associations also serve as Most associations also serve as an MLS provider or they may an MLS provider or they may contract those services through contract those services through a member association. a member association.

Page 25

MLS Providers are MLS Providers are Responsible for:Responsible for:

billing and collection of MLS fees billing and collection of MLS fees maintenance of the subscriber maintenance of the subscriber

databasedatabase enforcement of MLS rulesenforcement of MLS rules providing minimum training providing minimum training providing basic level of customer providing basic level of customer

support.support.

Enforcement of MLS RulesEnforcement of MLS Rules

Complaints must:Complaints must: be in writingbe in writing identify the complaining partyidentify the complaining party be submitted to the MLS be submitted to the MLS

Provider of the alleged violator Provider of the alleged violator (or through their member (or through their member association)association)

The MLS CommitteeThe MLS Committee

Considers complaintsConsiders complaints

Imposes sanctionsImposes sanctions

Sanctions can be appealed Sanctions can be appealed through the Professional through the Professional Standards CommitteeStandards Committee

Maximum fines Maximum fines for MLS Violationsfor MLS Violations

Recently increased from Recently increased from $5,000 to $15,000$5,000 to $15,000

Page 25

Improper AdvertisingImproper Advertising

Redistribution of the MLS Redistribution of the MLS content to websites other content to websites other than the broker/agent than the broker/agent owned sites owned sites

Property information posted Property information posted to the internet not kept to the internet not kept current current

Page 26Page 26

More Improper AdvertisingMore Improper Advertising Inclusion, without permission, Inclusion, without permission,

of other brokers listings in of other brokers listings in print media (newsletters, print media (newsletters, postcards) postcards)

Publication of sold Publication of sold information on specific information on specific properties properties

Copying photos and other Copying photos and other media from prior listingsmedia from prior listings

MULTIPLEMULTIPLE LISTING SERVICELISTING SERVICERULES AND REGULATIONS OFRULES AND REGULATIONS OF::

NORTH TEXAS REAL ESTATE NORTH TEXAS REAL ESTATE INFORMATION SYSTEMS, INC. INFORMATION SYSTEMS, INC. (NTREIS)(NTREIS)

SECTION 3 - PURPOSESECTION 3 - PURPOSE

A Multiple Listing Service is a means A Multiple Listing Service is a means by which authorized Participants by which authorized Participants make blanket unilateral offers of make blanket unilateral offers of compensation to Other Participants compensation to Other Participants

A facility for the orderly correlation A facility for the orderly correlation and dissemination of listing and dissemination of listing information so Participants may information so Participants may better serve their clients and the better serve their clients and the public. public.

Page 28

Entitlement Entitlement to compensationto compensation

Is determined by the Is determined by the Other Participant's Other Participant's performance as procuring performance as procuring cause of the sale or cause of the sale or lease.lease.

Page 29

Let’s Define…..who is:Let’s Define…..who is:

"Participant""Participant" means an eligible means an eligible Designated REALTOR® Member Designated REALTOR® Member of an Association of REALTORS® of an Association of REALTORS® or Designated Broker who or Designated Broker who satisfies the requirements of satisfies the requirements of Section 5.04 or Section 5.05 of Section 5.04 or Section 5.05 of the Bylaws of NTREIS.the Bylaws of NTREIS.

Page 30

Let’s Define…..who is:Let’s Define…..who is: ""SubscriberSubscriber"" means a non-means a non-

principal broker, sales associate, principal broker, sales associate, and a licensed or certified and a licensed or certified appraiser affiliated with a appraiser affiliated with a Participant. Participant.

"Other Participant""Other Participant" means a means a Participant, other than the Listing Participant, other than the Listing Participant, who is working with a Participant, who is working with a prospective buyer(s) or tenant(s) prospective buyer(s) or tenant(s) of Listed Propertyof Listed Property


"Clerical Office Staff""Clerical Office Staff" means means those licensed/unlicensed those licensed/unlicensed employees of, or independent employees of, or independent contractors associated with a contractors associated with a Participant member who Participant member who performs exclusively clerical performs exclusively clerical duties and are duties and are not not engaged in engaged in listing, showing, marketing, or listing, showing, marketing, or selling Listed Property.selling Listed Property.


““Personal Assistants"Personal Assistants" means those licensed or means those licensed or unlicensed employees unlicensed employees of, or independent of, or independent contractors associated contractors associated with a Subscriber.with a Subscriber.

Page 30

PARTICIPATION POLICIESPARTICIPATION POLICIES

Participation in the MLS is Participation in the MLS is available to the firm, available to the firm, partnership, or corporation of partnership, or corporation of any REALTORS® principal of any REALTORS® principal of an Associationan Association

Must pay required dues and Must pay required dues and fees and agree to abide by the fees and agree to abide by the Bylaws and the Rules Bylaws and the Rules

PARTICIPATION POLICIESPARTICIPATION POLICIES Participants must hold a current, Participants must hold a current,

valid real estate broker's licensevalid real estate broker's license

Participants must be capable of Participants must be capable of accepting and offering accepting and offering compensation to and from Other compensation to and from Other Participants Participants

Or be licensed or certified to Or be licensed or certified to engage in the appraisal of real engage in the appraisal of real property. property.

Page 31Page 31

LIABILITYLIABILITY Each Participant shall be liable Each Participant shall be liable

for all obligations to the MLS for all obligations to the MLS for the Participant's firm, for the Participant's firm, partnership, or corporation partnership, or corporation and for compliance with the and for compliance with the Bylaws of NTREIS and these Bylaws of NTREIS and these Rules by all persons affiliated Rules by all persons affiliated with such Participant who with such Participant who utilize the MLS.utilize the MLS.

Page 32

REQUIRED TRAININGREQUIRED TRAINING Every member must complete an Every member must complete an

approved course of MLS computer approved course of MLS computer training. training.

Each MLS Provider will be Each MLS Provider will be responsible for providing the responsible for providing the course course

Each Participant and Subscriber Each Participant and Subscriber must complete the training before must complete the training before being furnished a public and being furnished a public and private ID No. and access to the private ID No. and access to the MLS.MLS.

Page 32

A PenaltyA Penalty

A Participant will be fined by A Participant will be fined by the MLS Provider in an amount the MLS Provider in an amount determined by the MLS Provider determined by the MLS Provider for each Subscriber not reported for each Subscriber not reported by the Participant who uses the by the Participant who uses the MLS.MLS.

Page 33

MLS Subscription WaiversMLS Subscription Waivers Available only to: Available only to:

A. Clerical Office Staff of a A. Clerical Office Staff of a Participant Participant

(NOTE: Licensed Personal (NOTE: Licensed Personal Assistants of Subscribers do not Assistants of Subscribers do not qualify under this exemption).qualify under this exemption).

B. Property managers who collect B. Property managers who collect rent only and do not lease or list rent only and do not lease or list units for lease in the MLS.units for lease in the MLS.

Page 33

More Waivers….More Waivers….

C. Commercial salespersons who do C. Commercial salespersons who do not list, show, sell or lease not list, show, sell or lease residential property required to be residential property required to be filed with the MLS.filed with the MLS.

D. Appraisers, engaged exclusively in D. Appraisers, engaged exclusively in commercial appraisals, who do not commercial appraisals, who do not utilize the MLS.utilize the MLS.

E. Corporate officers who do not show, E. Corporate officers who do not show, list, sell, lease, or appraise real list, sell, lease, or appraise real property.property. Page 33

LISTING PROCEDURESLISTING PROCEDURES

Acceptable:Acceptable: Exclusive Right to Sell ListingsExclusive Right to Sell Listings Exclusive Agency ListingsExclusive Agency Listings

Unacceptable:Unacceptable: Net ListingsNet Listings Open ListingsOpen Listings Non-Agency ListingsNon-Agency Listings

Page 34

The Participant RepresentsThe Participant Represents By submitting a listing to the By submitting a listing to the

MLS, the Listing Participant MLS, the Listing Participant warrants and represents that warrants and represents that the Listing Participant has a the Listing Participant has a fully executed Qualified fully executed Qualified Listing Agreement signed by Listing Agreement signed by each property owner.each property owner.

The The Exclusive Right to Sell ListingExclusive Right to Sell Listing

Owner authorizes the Owner authorizes the Listing Participant to make Listing Participant to make blanket unilateral offers of blanket unilateral offers of compensation to Other compensation to Other ParticipantsParticipants

Page 35

The The Exclusive Agency ListingExclusive Agency Listing

Authorizes the Listing Authorizes the Listing Participant, as exclusive agent, Participant, as exclusive agent, to make offers of compensation to make offers of compensation to Other Participants to Other Participants but the but the owner reserves the right to sell owner reserves the right to sell the property on an unlimited or the property on an unlimited or restrictive basis. restrictive basis.

Page 35Page 35

EA (exclusive Agency) EA (exclusive Agency)

or or ER (exclusive Right to Sell)ER (exclusive Right to Sell)

Exclusive agency listings Exclusive agency listings and exclusive right-to-and exclusive right-to-sell listings will be sell listings will be clearly distinguishedclearly distinguished

Page 35Page 35

TIMING….TIMING…. Each listing of property for sale Each listing of property for sale

or lease, located within the or lease, located within the primary service area of NTREIS, primary service area of NTREIS, must be filed with MLS within 3 must be filed with MLS within 3 daysdays

from the effective date of the from the effective date of the listing.listing.

Owner can prohibit in writing.Owner can prohibit in writing.Page 36

The Rules, The Rules, the rules, the rulesthe rules, the rules

Each Listed Property may be filed Each Listed Property may be filed in only one Property Type in only one Property Type Classification and one geographic Classification and one geographic area of the MLS; area of the MLS;

However if a property is listed for However if a property is listed for sale and for lease simultaneously, sale and for lease simultaneously, such listing may appear in the such listing may appear in the appropriate categories. appropriate categories.

And Even More RulesAnd Even More Rules

For listings appearing in the MLS For listings appearing in the MLS more than once, the Participant more than once, the Participant will be fined $50.00 each day the will be fined $50.00 each day the listing appears as a duplicate. listing appears as a duplicate.

FOR SALE/FOR LEASEFOR SALE/FOR LEASE

If an owner lists property for If an owner lists property for sale and for lease with sale and for lease with different brokers, the owner different brokers, the owner shall specify in writing to each, shall specify in writing to each, whether only a "For Sale" or whether only a "For Sale" or only a "For Lease" sign or both only a "For Lease" sign or both signs may be placed on the signs may be placed on the Listed Property. Listed Property.

Page 37

AdvertisingAdvertising

Listed Property may be Listed Property may be advertised only by the advertised only by the Listing Participant or Listing Participant or owner(s), unless otherwise owner(s), unless otherwise authorized in writing by the authorized in writing by the Listing ParticipantListing Participant

Listing Participant to VerifyListing Participant to Verify Accuracy of the informationAccuracy of the information That the language is not offensiveThat the language is not offensive That the information does not That the information does not

violate Federal Fair Housing Lawsviolate Federal Fair Housing Laws That the information does not That the information does not

violate the duty of confidentiality violate the duty of confidentiality without the owner’s consent without the owner’s consent

Page 37

Do Not Fix, Control…….Do Not Fix, Control…….

NTREIS may not fix, control, NTREIS may not fix, control, specify, recommend, suggest, specify, recommend, suggest, record nor monitor commission record nor monitor commission rates , professional service fees rates , professional service fees or commission splits for or commission splits for brokerage services to be brokerage services to be rendered by a Participant. rendered by a Participant.

Page 38Page 38

Terminated from MLSTerminated from MLS

For failing to abide by a For failing to abide by a membership duty membership duty (violation of the Code of (violation of the Code of Ethics, Association Bylaws, Bylaws of NTREIS, the Ethics, Association Bylaws, Bylaws of NTREIS, the Rules, or other membership obligationRules, or other membership obligation

Current Listings, at the Current Listings, at the Participant's option, can be Participant's option, can be retained in the MLS until sold, retained in the MLS until sold, leased, withdrawn, or expired.leased, withdrawn, or expired.

Page 38Page 38

Terminated from MLSTerminated from MLS For failure to pay dues, fees or For failure to pay dues, fees or

chargescharges

the MLS Staff will withdraw all of the the MLS Staff will withdraw all of the expelled or terminated Participant's expelled or terminated Participant's listings which are filed with the MLS. listings which are filed with the MLS.

Notices of suspension/termination will Notices of suspension/termination will serve as notification that listings of serve as notification that listings of Participant will be withdrawn from the Participant will be withdrawn from the MLS.MLS.

Page 39Page 39

Listings may be withdrawn..Listings may be withdrawn..

Listings of property may be Listings of property may be withdrawn from the MLS, by the withdrawn from the MLS, by the Listing Participant, before the Listing Participant, before the expiration date of the listing expiration date of the listing agreement with written agreement with written authorization from the owner(s) authorization from the owner(s) of such property for such of such property for such withdrawal. withdrawal.

Page 39

Not to Hide $$Not to Hide $$

A Listing Participant shall not A Listing Participant shall not withdraw or cancel a Listed withdraw or cancel a Listed Property for the purpose of Property for the purpose of concealing the sale or the sales concealing the sale or the sales price.price.

Page 39

Listing information Listing information submitted via computersubmitted via computer

Participant warrants and Participant warrants and represents that such Participant represents that such Participant has a fully executed Qualified has a fully executed Qualified Listing Agreement and Data Listing Agreement and Data Input Sheet in such Participant's Input Sheet in such Participant's office office

When submitted via computerWhen submitted via computer

Participants covenant with Participants covenant with NTREIS and all Other NTREIS and all Other Participants to retain a copy of Participants to retain a copy of such Listing Agreement and Data such Listing Agreement and Data Input Sheet for at least one year Input Sheet for at least one year after the date the Listed after the date the Listed property is sold, leased, or property is sold, leased, or expires, whichever occurs later.expires, whichever occurs later.

Page 39

Participant/Subscriber who Participant/Subscriber who submits Media :submits Media :

Warrants and represents that such has Warrants and represents that such has ownership of, or the authority from the ownership of, or the authority from the owner to submit such Media to the owner to submit such Media to the MLSMLS

Grants NTREIS a non-exclusive license Grants NTREIS a non-exclusive license authorizing the MLS, other authorizing the MLS, other Participants and Subscribers the right Participants and Subscribers the right to publish the Media anywhere the to publish the Media anywhere the MLS Media may appear.MLS Media may appear.

Page 40Page 40

NTREIS reserves the right to NTREIS reserves the right to reject/remove from the MLS:reject/remove from the MLS:

Any Media containing any Any Media containing any text, personal advertising, or text, personal advertising, or personal promotion of a personal promotion of a Subscriber or Participant. Subscriber or Participant.

Media from a Prior ListingMedia from a Prior Listing Before a Participant or Before a Participant or

Subscriber uses Media from a Subscriber uses Media from a previous listing submitted to the previous listing submitted to the MLS, that Participant or MLS, that Participant or Subscriber shall obtain the Subscriber shall obtain the written consent of the former written consent of the former Listing Participant to use such Listing Participant to use such Media.Media.

Page 40

NTREIS does not permitNTREIS does not permit The following to be placed in the The following to be placed in the

Property Description section of a Property Description section of a listing: listing:

the name of the listing agent the name of the listing agent phone numberphone number e-mail address or e-mail address or web address of the listing agent or web address of the listing agent or other similar information that is not other similar information that is not

descriptive in nature and relevant to an descriptive in nature and relevant to an accurate portrayal of the Listed Property accurate portrayal of the Listed Property

Page 41

Let’s Keep It RealLet’s Keep It Real

Only a true current photograph of Only a true current photograph of Listed Property may be placed in Listed Property may be placed in the “Property Photograph” sectionthe “Property Photograph” section

No decorative bordersNo decorative borders No other embellishmentsNo other embellishments No enhanced modifications No enhanced modifications No misrepresentation of the true No misrepresentation of the true

condition or appearance of the condition or appearance of the property. property.

Page 41

AppointmentsAppointments Appointments for showing Listed Appointments for showing Listed

Property shall be conducted Property shall be conducted exclusively through the Listing exclusively through the Listing Participant. Participant.

The Listing Participant may authorize The Listing Participant may authorize the Other Participant to show the the Other Participant to show the Listed Property as indicated in the Listed Property as indicated in the showing instructions or showing showing instructions or showing features field. features field.

Page 42

When You Can’t When You Can’t Reach the Listing AgentReach the Listing Agent

If after reasonable effort you If after reasonable effort you are unable to contact the Listing are unable to contact the Listing Participant or his/her Participant or his/her representative, you may make representative, you may make direct contact with the owner direct contact with the owner onlyonly for the purpose of showing for the purpose of showing Listed Property.Listed Property.

Page 42

OffersOffers With the consent of the Listing With the consent of the Listing

Broker you may deliver an offer Broker you may deliver an offer or counter-offer to the owner, or counter-offer to the owner, so long asso long as you do not discuss or you do not discuss or attempt to discuss the terms or attempt to discuss the terms or conditions of the offer or conditions of the offer or counter-offer with the owner. counter-offer with the owner.

A copy of the offer or counter-A copy of the offer or counter-offer must be delivered to the offer must be delivered to the listing broker.listing broker.

Page 42

Keep Those Offers Coming!Keep Those Offers Coming!

Unless otherwise agreed in Unless otherwise agreed in writing by the Listing Participant writing by the Listing Participant and the owner, the Listing and the owner, the Listing Participant shall submit to the Participant shall submit to the owner all written offers to owner all written offers to purchase, lease, or exchange the purchase, lease, or exchange the Listed Property as soon as Listed Property as soon as practicable practicable until the closing of a until the closing of a sale. sale.

Page 42

Brokerage Activity OnlyBrokerage Activity Only Access, entrance to, and/or Access, entrance to, and/or

activities of any agent while activities of any agent while inside Listed Property is inside Listed Property is restricted and limited to restricted and limited to brokerage activities for brokerage activities for authorized real estate licensees authorized real estate licensees pursuant to the Texas Real pursuant to the Texas Real Estate License Act and such Estate License Act and such other activities expressly other activities expressly authorized by the owner of the authorized by the owner of the Listed Property.Listed Property. Page 43

Possible FinesPossible Fines A Listing Participant must report A Listing Participant must report

to the MLS any change in the to the MLS any change in the status of a Listed Property status of a Listed Property within three (3) days within three (3) days

Upon receipt of a written Upon receipt of a written complaint MLS staff will attempt complaint MLS staff will attempt to contact the accusedto contact the accused

Possible fines can be from $50-Possible fines can be from $50-$100 per day if not resolved$100 per day if not resolved

True Sales Price True Sales Price Must Be Reported Unless…..Must Be Reported Unless…..

It is expressly prohibited by a It is expressly prohibited by a provision in the contract of sale provision in the contract of sale or lease.or lease.

The true sales price must be The true sales price must be reported promptly to the MLS reported promptly to the MLS after the closing of a transaction after the closing of a transaction by the Listing Participant. by the Listing Participant.

Can Parties Request Sales Can Parties Request Sales Price Not Be Disclosed?Price Not Be Disclosed?

YesYes The Participant who is working for or The Participant who is working for or

with the Party requesting non-disclosure with the Party requesting non-disclosure of the true sales price shall furnish to the of the true sales price shall furnish to the MLS Staff within three (3) daysMLS Staff within three (3) days

A copy of the contract or an affidavit A copy of the contract or an affidavit signed by the Listing Participant and the signed by the Listing Participant and the Other Participant certifying that the Other Participant certifying that the contract contains a confidentiality contract contains a confidentiality provision prohibiting the disclosure of provision prohibiting the disclosure of the true sales pricethe true sales price

Page 43Page 43

Just Say “NO”Just Say “NO”

The Listing Participant shall The Listing Participant shall not use the withdrawn not use the withdrawn status or any other status to status or any other status to avoid reporting the sales avoid reporting the sales price or any other sales price or any other sales informationinformation

Pages 44

For each violation, a Participant For each violation, a Participant shall be subject to a minimum shall be subject to a minimum

fine offine of

$100 for the first violation$100 for the first violation $500 for the second violation $500 for the second violation

occurring within a twelve occurring within a twelve month periodmonth period

$1,000 for each additional $1,000 for each additional violation occurring within such violation occurring within such twelve-month period.twelve-month period.

Pages 44

No Sales Price= List PriceNo Sales Price= List Price

The last known listing price, if The last known listing price, if any, otherwise the original listing any, otherwise the original listing price, will be used to replace any price, will be used to replace any reported zero sales price. reported zero sales price.

Such sales shall be identified by Such sales shall be identified by a 'Z' flag indicating that the a 'Z' flag indicating that the reported sales price is either the reported sales price is either the last known listing price or the last known listing price or the original listing price, as the case original listing price, as the case may be.may be.

Page 44

Real Estate SignsReal Estate Signs

Only the "For Sale" sign of the Only the "For Sale" sign of the Listing Participant may be Listing Participant may be placed on a Listed Property. placed on a Listed Property.

Prior to closing, the Other Prior to closing, the Other Participant may place a sold Participant may place a sold sign on the Listed Property only sign on the Listed Property only with the consent of the Listing with the consent of the Listing ParticipantParticipant..

Page 45

Passwords/access codes Passwords/access codes = Secret= Secret

Users shall not furnish to or Users shall not furnish to or permit the use of their MLS permit the use of their MLS passwords or access codes to passwords or access codes to any person, firm, company, or any person, firm, company, or other entity.other entity.

Page 45

COMPENSATION TO COMPENSATION TO OTHER PARTICIPANTS OTHER PARTICIPANTS

May not publish or display to May not publish or display to customers or clientscustomers or clients

The Listing Participant shall specify The Listing Participant shall specify on each listing filed with the MLS the on each listing filed with the MLS the compensation offered to Other compensation offered to Other Participants for their services . Participants for their services .

Entitlement to compensation is Entitlement to compensation is determined by the Other determined by the Other Participant's performance as the Participant's performance as the procuring cause of sale (or lease). procuring cause of sale (or lease).

Page 45

COMPENSATIONCOMPENSATION

At the option of the Listing At the option of the Listing Participant, subject to authorization Participant, subject to authorization by the owner, the Listing Participant by the owner, the Listing Participant retains the right to determine the retains the right to determine the amount of compensation offered to amount of compensation offered to Other Participants Other Participants

Compensation may be the same or Compensation may be the same or different, or zero to either subagents different, or zero to either subagents (SAC) or buyer agents (BAC), but not (SAC) or buyer agents (BAC), but not zero to both of them. zero to both of them.

Variable Rate CommissionVariable Rate Commission Must be disclosed by the Listing Must be disclosed by the Listing

Participant as required by the MLS. (VR Participant as required by the MLS. (VR Flag)Flag)

A variable rate commission agreement A variable rate commission agreement = the owner of the property agrees to = the owner of the property agrees to pay a specified commission if the pay a specified commission if the property is sold or leased by the Listing property is sold or leased by the Listing Participant Participant

And a different commission if the sale or And a different commission if the sale or lease results through the efforts of an lease results through the efforts of an Other Participant or through the efforts Other Participant or through the efforts of the seller/landlord.of the seller/landlord.

Disclose the DifferentialDisclose the Differential In response to inquiries from Other In response to inquiries from Other

Participants, the Listing Participant Participants, the Listing Participant shall disclose the differential which shall disclose the differential which would result.would result.

If the Other Participant is a If the Other Participant is a buyer/tenant agent, the Other buyer/tenant agent, the Other Participant must disclose such Participant must disclose such information to his/her client, before information to his/her client, before the client makes an offer to purchase the client makes an offer to purchase or lease.or lease. Page 46Page 46

ENFORCEMENT OF ENFORCEMENT OF RULES OR DISPUTES RULES OR DISPUTES

Each complaint alleging a violation Each complaint alleging a violation of the Rules must: of the Rules must:

be in writing; be in writing; identify the complaining party; and identify the complaining party; and be submitted to the MLS Provider be submitted to the MLS Provider

from whom the participant/subscriber from whom the participant/subscriber against whom the complaint is filed against whom the complaint is filed either obtains MLS service or holds either obtains MLS service or holds membership. membership.

Page 47

Who Do You Tell??Who Do You Tell??

If the alleged offense is a If the alleged offense is a violation of the Rules it may violation of the Rules it may be considered and determined be considered and determined by the MLS Provider where the by the MLS Provider where the accused holds membership or accused holds membership or by the MLS Provider from by the MLS Provider from whom the accused obtains whom the accused obtains MLS service.MLS service.

Page 47

If a violation is found….If a violation is found….

the MLS Committee, which the MLS Committee, which considered the complaint may considered the complaint may impose a sanctionimpose a sanction

the recipient of such sanction the recipient of such sanction may request a hearing by the may request a hearing by the Professional Standards Professional Standards CommitteeCommittee

Page 47

Complaints involving Complaints involving arbitration, a violation of arbitration, a violation of another Broker’s agency another Broker’s agency relationship or unethical relationship or unethical behavior will be referred to behavior will be referred to the Professional Standards the Professional Standards committee.committee.

Page 47

USE OF COPYRIGHTED USE OF COPYRIGHTED MLS COMPILATIONS MLS COMPILATIONS

Participants shall:Participants shall: maintain control over each copy of any maintain control over each copy of any

MLS Compilation leased to them by NTREIS MLS Compilation leased to them by NTREIS shall not distribute copies to persons who shall not distribute copies to persons who

are not Subscribers.are not Subscribers. Be permitted to display the MLS Be permitted to display the MLS

Compilation solely to prospective buyers Compilation solely to prospective buyers and tenants in their ordinary business and tenants in their ordinary business activities.activities.

Page 48Page 48

Things We Can Do…Things We Can Do…

MLS information necessary to MLS information necessary to determine the estimate of value determine the estimate of value may be reproduced and may be reproduced and attached to the report as attached to the report as supporting documentation. supporting documentation.

Page 48

NTREIS ReportsNTREIS Reports May be used by Participants for May be used by Participants for

demonstrations of market share in demonstrations of market share in advertising by a Participant or in other advertising by a Participant or in other public representations. public representations.

Participants may not include, in any Participants may not include, in any advertising, information about specific advertising, information about specific properties, including the address, properties, including the address, sales price, or other terms of sale, sales price, or other terms of sale, which are listed with Other which are listed with Other Participants or which were sold by Participants or which were sold by Other Participants (as either listing or Other Participants (as either listing or cooperating broker).cooperating broker).

Required NoticeRequired Notice Any advertising based on information Any advertising based on information

supplied by NTREIS or the MLS must supplied by NTREIS or the MLS must clearly demonstrate the period of time clearly demonstrate the period of time over which such claims are based and over which such claims are based and shall include the following notice:shall include the following notice:

"Based on information from the "Based on information from the North Texas Real Estate North Texas Real Estate Information Systems, Inc., for the Information Systems, Inc., for the period (date) through (date)."period (date) through (date)."

Page 49

No Seller Info No Seller Info to Customer or Clientsto Customer or Clients

Participants and Subscribers may not Participants and Subscribers may not publish or display to customers or publish or display to customers or clients: clients:

the name of the seller/occupant the name of the seller/occupant phone numberphone number or e-mail address of any seller or or e-mail address of any seller or

occupant of Listed Property.occupant of Listed Property.

Page 50Page 50

More Ways to Risk Your MoneyMore Ways to Risk Your Money

The Real Estate License ActThe Real Estate License Act Rules of the Texas Real Estate Rules of the Texas Real Estate

CommissionCommission NAR Code of EthicsNAR Code of Ethics Anti-Trust LawsAnti-Trust Laws Deceptive Trade Practices Act (DTPA)Deceptive Trade Practices Act (DTPA) Federal, State and Local Fair Housing Federal, State and Local Fair Housing

ActsActs

That’s All FolksThat’s All Folks

risking your money

Business