From the dawn of time, the requirement for humans to leave the cave, hunt, and return victorious has been paramount to the survival of the species. Clearly, a few things have changed, but when it comes to real estate sales the process remains conceptually the same perhaps adding farming to the metaphor, as well as new methods and technology. REALTORS® are compensated when they successfully help a client buy, sell, or in some cases lease property, but the whole process must start with a client. Although many REALTORS® have a high percentage of repeat and referral clients, the search for new clients is a continuous activity. The methods of new client farming can be very creative but there are fences along that road and we need to consider a few of those here.
Service Agreements Shield
A service agreement is a written agreement between a client and a brokerage that establishes rights and obligations between the parties. This is a contract formed in common law and acts as a shield to the solicitation of others for the sake of the same service set. For example, provincially harmonized rules prohibit the solicitation of any party who is currently in a service agreement with another brokerage. This means that in many cases the REALTOR® needs to ask the question of the consumer to ensure they are not in an existing relationship.
Direct Contact Prohibition
Once a REALTOR® knows or ought to know that an individual is in a service agreement with another member, any direct contact or communication is considered an improper solicitation. Unless instructed otherwise by the brokerage a REALTOR® must never attempt to contact or communicate with another member’s client except through the member themselves or it could be seen as interference with a contract. The only exception to this prohibition is in circumstances where the client initiates the communication, and this too must be handled carefully, tactfully, and professionally under the REALTORS® Code of Conduct.
Breaking a Contract
It should be noted that it is a violation of common law to counsel anyone on how to break a contract of any type. If a client is unhappy with their current arrangement with another REALTOR® and reaches out to find out if you can represent them instead, the answer can only be that you cannot as long as they have contractual obligations to the other member. You may direct them to the broker of the brokerage by whom they are represented, or to seek legal advice, but you cannot go any further down the path of advice than that.
MLS® System Information
The MLS® system is a cooperative listing service for member brokerages to share listing information for the purpose of purchase and sale. The MLS® system is not intended to provide information to members to be used to target active or previous clients of any member to offer services to. The provincially harmonized rules prohibit this activity and take violations very seriously to protect the integrity of the cooperative system for all members. This means that if a listing expired on the MLS® system, that information can not be used by a member to target the owner of the property to list again but this time with them. Similarly, if a member also runs a lawn maintenance business, they cannot run a list of vacant properties to target for lawn mowing services. Any misuse of the MLS® system data may result in the loss of the privilege to access the MLS® system altogether!
Targeted Advertising
Any number of advertising platforms exist today to market services to the public. These include social media, internet ads, television, billboards, bus benches, newspapers, etc. All of these media options are broad and un-targeted ways of getting the message out that a REALTOR® has professional services to offer. The problem comes when the more targeted, hand-to-hand combat style methods of door-knockers, flyers, or addressed mail are used to more specifically target a neighborhood, street, or property. In themselves, they are acceptable and should always use a disclaimer that they are not meant to solicit anyone already in a service agreement. However, if they are used where the member knows or ought to have known the property is already in a service agreement with another brokerage this is a violation of the provincial rules as well.
With a REALTOR® community of over 11,000 entrepreneurs, the value of the services they offer is well proven and worthy of advertising, however, the fence posts of good conduct and professionalism remain in place for the protection of the consumer, the industry, and the membership.