Realty ethics, or lack of. - InspectionNews

Brian E Kelly · #1 (**permalink**) 05-22-2007, 03:53 PM

I called on a local realty company today and was told that I had to call this certain person regards to leaving my business cards and brochures. I made the call and was informed that I could do so if I joined their "Reality Group". I asked what that entailed and was informed that I could join at three different levels. Level 1 is $500/year and I could only leave my business cards at the offices and will have a small listing on their web site. Level 2 was $1500/year and I could leave cards and brochures at the offices and have a larger listing on the open site. Oh yea the first level my listing would be on only the Realtors private viewing list. At that point I asked if this was even legal in New York and was abruptly told it was advertising and totally legal. At that time told her that I would not be interested to join this "Realty Club" and hung up.
This "club" is for referrals to all of there customers who are looking for services and refereed to the club members only. The club consist of Lawyers, Hi's Plumbers, HVAC tech and so on. This in my mind as I understand New York State Law (as a Hi and not a Lawyer) is not legal much less ethical according to our Laws as Hi's and for Real Estate Agents. Is there some thing that I am missing or does this go on in other area's?
My other question is if this is not legal how does one go about reporting this, or is this not worth the fight?

Jim Robinson · #2 (**permalink**) 05-22-2007, 04:08 PM

That is terrible. I have no idea if it is legal or not, but I sure hope no one around my area hears about it and gets the bright idea. $1500? Man, that it steep. I wonder if their parent organization (if there is one) is on board with this?

Smells bad all the way from here.

Randy Aldering · #3 (**permalink**) 05-22-2007, 04:29 PM

This is called a "preferred vendor" arrangement. The legality of it depends on how it is managed. The federal government [HUD] has in the past busted some high profile broker house [real estate offices] for doing this. It may violate federal law. To find out, contact HUD and your state's Attorney General office, and tell them about it. It's always worth the fight. Wrong is wrong. Always has been, always will be.