The Standard of Practice
REALTORS® shall not knowingly, during or following the termination of professional relationships with their clients:
1) reveal confidential information of clients; or
2) use confidential information of clients to the disadvantage of clients; or
3) use confidential information of clients for the REALTOR®’s advantage or the advantage of third parties unless:
a) clients consent after full disclosure; or
b) REALTORS® are required by court order; or
c) it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or
d) it is necessary to defend a REALTOR® or the REALTOR®’s employees or associates against an accusation of wrongful conduct.
Okay – so we have all read the Standards of Practice before, hopefully!
What is Confidential?
What does confidentiality mean? How do we protect our client’s confidential information? What information is confidential?
For my clients, it is anything which has no bearing on the facts of the contract or does not need to be disclosed. Period! The buyer of my client’s property has no need to know anything about my client’s personal life; their marital status, children, job, their spouses’ job, whether they have bought another home or anything else, unless my client has given permission for me to disclose. Confidentiality is not limited to what their bottom line is!
Our Clients Trust Us
When we create a relationship with a client, we learn a lot about them. We may know they are facing a divorce or have had a death in the family. We know where they work and what their financial status is. Sometimes, we are privy to more detail than we even care to know about. ? For me, that’s okay, because sometimes my clients just need someone to talk to. One thing for sure, they do not expect me to tell anyone else.
We advise our clients not to talk to buyers or other agents if they happen to be home during showings. They will always say too much! We need to do the same during our communication with the buyer or seller’s agent. Besides the obvious of not talking too much and revealing specific information, how can we protect our client’s confidentiality?
Common Sense Practices
Get rid of the diplomas – a buyer who sees the seller is a doctor, engineer, attorney, etc. assumes they have money and can afford to take less. I once hid my client’s medical coats to the back of the hall closet and advised him to keep them there.
Don’t be lazy – when your client emails you with a cover sheet from their employer, remove the cover sheet before forwarding the necessary documents and black out the return fax number and any identifying info. I had a buyer who determined the seller was wealthy because of where they worked. They knew because the cover sheet was attached with the other documents and hey, I represent my client, so any bit of information I can get is forwarded.
Have your clients keep bills and private mail in a secure place. No need for the buyer to see a past due notice sitting on the kitchen counter or know the balance of the current mortgage.
These are just a few ideas. I‘m sure there are many others; please share your best practices for protecting your client’s confidential information.
Jim Reppond
October 1, 2008 at 8:45 am
There are times when sharing personal information with the other party is important or helpful, particularly during negotiations. But it’s a Realtor’s duty to be absolutely clear with their client about what and how they are going to use this information, and make sure the client is on board and agree with the strategy.
A good example might be to sharing the Buyer’s approximate credit scores with the listing agent to have them feel comfortable and confidant in the Buyer’s ability to secure a loan, especially these days.
I like to think of a virtual mini-version of my client sitting on my shoulder watching and listening to me. If I get the feeling the mini-client might be uncomfortable with my behavior or what I am going to say, it’s time to stop and check in with my real client.
Jason Sandquist
October 1, 2008 at 8:46 am
Get this, this is funny, not really but I was working on a transaction and the other agent works in the company. The other agent is the Zipforms admin for the company and I wasn’t by a computer at the time when we were going back and forth. The agent brought up the idea of going into MY ZIPFORM ACCOUNT and drafting up an addendum for my client. Couldn’t believe it. Had to throw the hammer down on that one.
Steve Simon
October 1, 2008 at 9:01 am
Every two years I attend the Florida Real Estate License Law Instructor’s CE Seminar.
This topic is discussed in one way, shape or form or another each time. The amount of complaints relative to this subkect is very large.
It isn’t that complex a problem.
It’s having the initial understanding of:
What must I say,
What may I say,
What I must not say.
Then remembering it during the course of discussion.
If you remember to put your client first, you should be fine.
By the way, one civil action for breach of confindentiality (violation of fiduciary responsibilities), can, In Florida and elsewhere, result in the aforementioned civil action, as well as administrative action and or criminal penalty; it all depends upon what you said that you should not have, or what you didn’t say and you sould have:)
Kim Wood
October 1, 2008 at 12:41 pm
… and this applies forever and ever and ever… not just the life of the transaction !
Matt Stigliano
October 1, 2008 at 2:42 pm
On my first ever transaction, the seller’s agent gave me some important info without even thinking about it. Of course, when I went back to my client and explained the potential meaning of this information, we made an offer that was almost 50% below asking price. And it was accepted. And we thought it would be, because of the info the agent gave us. We were prepared to work back and forth if necessary, but because we knew more about the seller than he probably wished we knew, we were able to second guess him and feel confident in what we were doing. Amazing what a slip of the tongue (and in this case, it was a very slight slip) can do. Best thing I was ever taught by a CPA was to always answer the question, but never answer anything with your answer that wasn’t asked. Of course, with confidentiality, you can apply this MUCH more strictly, as you shouldn’t answer any question that would reveal info you shouldn’t be giving out.
Missy Caulk
October 1, 2008 at 6:11 pm
When I first meet with people before any client relationship is started, I go over the different ways people can be represented in MI. I tell them then I want them to know upfront about confidential information. I see it violated all the time, with comments like, “bring and offer, my clients HAVE to sell”, “they are closing on their home next week”, or something else that says, they are desperate.
Paula Henry
October 1, 2008 at 10:48 pm
Jim – A virtual mini client sitting on your shoulder will definately work 🙂
Jason- Sure, I’ll share my clients files with you – I can see it already, but would not be surprised to hear it happens.
Steve – Thanks for your teacher insight. Putting your client first is an excellent test of what is proper.
Kim – Yep!
Matt – How sad for that seller, but wonderful for your buyer. I wonder how many times this same scenario occurs.
Missy – When I hear comments like that I shudder. I had someone call me today about one of my listings – he asked what was going on with the home, are the owners elderly, do they want to move. I simply said, of course they want to move, their house is for sale.
Lori
November 23, 2008 at 8:29 pm
If anyone can help me out with the answer to this one, I’d appreciate it. I’ve been working with an agent since June. Over the past few weeks, I withdraw an offer on a house and was trying to get my deposit back. Unfortunately, my agent didn’t have me sign a form to get me out within 7 days of the inspection, but ultimately, I did get my deposit back, because the sellers goofed too. That’s not the issue. The issue is that last week, I received an email to my work email and in the subject it said, “Blank Blank Agent”, (I’ll keep the name of the agency private). I thought it was my agent’s boss, so I opened it. The email was from a former client of my agent. This woman stated that she was very friendly with a lot of the agents in the office and heard the trouble that my agent caused me. She said she begged one of her friends who works at this agency to give her my contact information because she wanted to tell me exactly what she thought of my agent and how my agent handled her daughter’s real estate search. I KNOW it’s not legal (i think) for someone in that real estate agency to just give my contact information out to a friend. But I want to know what recourse I have here. If I decided to file a claim against the agency, can I do that? And how?