Let’s go get sued some more…

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

At 360 Digest, an exceptionally fine real estate weblog, Marlow Harris weighs in with this idea about an incipient on-line real estate start-up:

Blue Roof, like Redfin and Zip Realty, misrepresents their status as “Realtor” and claims to be a member of the National Association of Realtors and adhere to its strict Code of Ethics, while actually NOT being a Realtor subject to their rules, regulations and ethical code.

I don’t know if this is true or not, with respect to any of the vendors named, but, if it is, it seems to invite considerable exposure to litigation. No, not a trademark infringement suit from the NAR. A judge might reasonably hold the RealtyBot sites to the claims they are making, even if those claims are untrue. A mere real estate licensee is answerable only to the statute law of the licensing jurisdiction. Realtors are held to much higher standards, both because of the NAR Code of Ethics and because of the presumption that the aspiration to professional status implies greater education and more rigorous care and diligence. Real estate brokers, whether or not they are Realtors, are held to the highest standards. Ignorance of the law is not only not an excuse, it is not even a mitigating factor.

For all its virtues, the internet has always been driven by an ‘aw shucks, we’re just having some fun’ attitude. Witness a major, multi-national communications conglomerate named ‘Yahoo’. But real estate is not an ‘aw shucks’ business. A real estate practitioner – licensee or not, Realtor or not – has the power to ruin his clients’ financial lives forever. We’re not talking about impersonating a Realtor, a funny idea. We’re talking about depersonalizing, deprofessionalizing – ultimately deligimating – the fiduciary relationship. If the agency law hammer ever drops on these practices, whether or not they are buttressed by lies, the damage awards are going to be collossal.