A friend in the commercial real estate business represented a property seller and made an oral agreement to collect a 3 percent commission on the sale, iinstead of the customary 4 percent for large deals (6 percent is more common for smaller deals).
The property sold. My friend received his commission check. It was about $100,000 more than he expected. He asked the title company why. He was pointed to the contract, which showed a 4 percent commission. Both parties had signed and overlooked the commission rate when customizing the template contract.
My friend grabbed his checkbook and wrote a check to the seller for the overpayment.
It would have been legal to keep the 4 percent commission, but it wasn’t right.
Another friend, also in real estate, told me of sitting in a new Realtors’ ethics training class. The instructor offered ideas on how to “sneak” text into contracts that will “hopefully” be overlooked and missed by the other party.
I do not want to be on the receiving end of that contractual deal. One litmus test for ethics is to ask, “Would I want it done to me?” This case flunks.
An article in Commercial Investment Real Estate Magazine tells of a seller’s agent wondering whether to tell a buyer’s agent that a rail line might be built next to a property in the far future. The agent told the buying agent. The agent followed a version of the Golden Rule: Do to others what you want done to you. The deal closed.
I appreciate what Frank Luntz wrote in “Win: The Key Principles to Take Your Business from Ordinary to Extraordinary”:
“This is the era of integrity, of voluntarily going above and beyond federal guidelines, ethics codes, ground rules and moral obligations. It is the era of continual improvement and never settling for the status quo. No matter your past successes or failures, communicating that you’re always striving to do more — and do it better — wins the hearts, minds and consumer dollars.”