In a world with more buyer representation agreements, questions begin to surface about what a broker should do when a client approaches them and asks them to write an offer, apropos of nothing. Under the NAR Code of Ethics, Article 16, through Standard of Practice 16-5, a broker is not permitted to “solicit buyer/tenant agreements from buyers/tenants who are subject to exclusive buyer/tenant agreements.” Standard of Practice 16-9 explains that a broker has an “affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service.” However, Standard of Practice 16-8 explains that “the fact that an exclusive agreement has been entered into with a REALTOR® shall not preclude or inhibit any other REALTOR® from entering into a similar agreement after the expiration of the prior agreement.” If a broker is contacted by a client who is currently represented by another REALTOR® in an exclusive agency relationship, Standard of Practice 16-6 explains that the broker can discuss “the terms upon which they might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement,” as long as the REALTOR® did not directly or indirectly initiate the discussion. For example, if you drop your business card in the client’s pocket and say, “call me,” you have initiated the conversation and should not be discussing your future representation.
When you put it all together, it means you should be asking your buyers, “Do you have an agent with a representation agreement?” before entering into representation agreements. If the answer is yes, then no more conversation with that client. You can contact the client’s broker and ask them when the representation agreement with that client expires, and if the broker refuses to tell you, Standard of Practice 16-5 permits a REALTOR® to contact the buyer to “secure such information [about the expiration date of the representation agreement] and may discuss the terms upon which the REALTOR® might enter into a future buyer agreement, or alternatively, may enter into a buyer agreement to become effective upon the expiration of any existing exclusive buyer agreement.”
Always remember: ask first. If the client is represented, apologize and explain that the code of ethics requires you to cease communications with the client and speak with the client’s current broker, and in the situations where you can talk with that client, only talk about the future representation. No coaching the client through terminating their current agent, no telling the client “Your agent did ______ wrong and I wouldn’t do that.”