The sale and termination between Barbara Buyer and Sam Salesperson had ethical flaws. The scenario was dishonest of Salesperson for entering into contract and then terminating the contract. The salesperson had signed a representative agreement with Barbara the buyer. Barbara asked for a two day extension on the earnest deposit and salesperson verbally agreed acknowledged he would send the two day extension contract to her. He never did send the contract for the two day extension he agreed upon, but had sent her a termination notice because she did not pay the earnest payment. The reason he sent her the termination notice was became he had gotten a higher bid from another buyer and wanted the money. He dishonestly broke a contract deal that was already made because of wanting more money. Then he made it look like she was late on the earnest deposit that he agreed he would uphold a two day extension verbally.
Barbara Buyer was faced with “untruth” of the purchasing of the trust. The seller’s dishonesty lead to the sale being terminated. The buyer had experienced “Gazumping”. This is when the seller takes an offer of a higher bid and does not give the original seller a chance to submit another bid. Buyer was also mislead into believing the sale was final and the earnest deposit could be made at a later date. The salesperson mislead the buyer and then terminated the contract. The buyer had signed contracts that were not tied through a lawyer and therefore the salesperson is in an ethical dilemma because of unauthorized practice of law. This means that the salesperson was not a legal attorney and therefore should not have been giving legal advice or preparing legal contracts.
The Buyer can have a cause of action because of the ethical violations of the seller. The buyer can take the documents to a lawyer and find out if legal action can be taken towards the seller. The documentation that was signed between the buyer and the seller may have grounds for breach of contract. An attorney would be able to look over the situation with the documentation and decided if a lawsuit is applicable. If the contracts were legal and binding that were signed then the breach of contract against the seller may hold up. The breach of contract against the seller is due to the seller not holding up to the agreement. The contract will then be void if one of the party did not uphold the signed agreement or contract.
The real estate contract has information about the property being sold. The contrast includes description of property, price, inspection, possession, conditions, grantee’s, standard provisions, additional provisions, non-binding, confidentiality, and signatures. The contracts are made to include all important information about the property, and the details of the seller and buyer. The contracts should be prepared by a lawyer or a real estate lawyer who can handle the exchange properly.
Buyers can avoid ethic issues when dealing with real estate. One of the main points a buyer can do when interested in purchasing real estate property is to have a lawyer check into the sale. A second opinion of a professional lawyer may be the difference between getting a legit and legal sale. If any contracts are presented then they need to be looked over by a lawyer to ensure the documents are real and proper for the action of sale.
A buyer should not hold verbal communication not at face value. If a verbal agreement is made then it would be best to get a legal document written up to ensure the verbal agreement stands on paper. If a person is willing to verbally agree but not legally agree then the sale should not be completed. A dishonest seller will not offer a true sale to the buyer.
Jenman, D. (2014). Ethical Concerns. Real Estate Industry, 1-12.
NAR. (2016). Code of Ethics. National Association of Realtors, 1-3.