Effect of distressed sales felt on 2010 year-end arbitration, grievance stats
Thursday, April 7, 2011
The number of arbitration cases addressed by the ORRA Professional Standards Committee increased slightly between 2009 (21) and 2010 (28), but the amount of commissions involved in the disputes continued a downward slide that began in 2008.
Arbitration cases in 2010 involved disputes over $122,477 worth of commissions. By comparison, arbitration cases in 2007 involved disputes over $645,529 worth of commissions.
"Decreasing arbitration amounts are yet another statistic impacted by the massive percentage of bank-owned and short-sale transactions that are taking place,” explains Tansey Soderstrom, 2011 chairman of the committee. "These lower-priced sales are driving down both our area’s overall median price and our members’ commissions. As a result, arbitration disputes are involving smaller commission-dollar amounts.”
Bank-owned and short-sale properties, which have a combined median price of $80,000, accounted for a record 75 percent of transactions that took place in January 2011. By comparison, the median price for "normal” sales in January 2011 was $145,000.
According to Soderstrom, short-sales and bank-owned properties also influenced the number of individual ethics violations found in 2010, which at 108 is double the number found in 2009 (59). "These types of sales transactions simply lend themselves to more opportunities for mistakes and confusion and anger, which we have found to be the dominate motivation in the filing of an ethics complaint.”
As usual, most (16.7 percent) violations in 2010 involved Article 1 of the REALTOR® Code of Ethics (see sidebar, below). Issues pertaining to Article 12 accounted for the second most (14.8 percent) violations.
The overall number of complaints filed has remained relatively stable over the past three years, ranging from 36 in 2010 to 40 in 2008. The number of complaints spiked in 2007 and 2006, with 75 and 96 complaints filed in those years.
REALTOR® Code of Ethics
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS®, pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve Realtors® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS®emain obligated to treat all parties honestly.
REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.