Real Estate Service Coach [RESC]: Ethics

Showing posts with label Ethics. Show all posts

6/01/2013

Defining and Discussing Rebate

The old dogs say rebate is unethical. I say it is only a business policy by choice of some sellers (especially Developers) and it is just a matter of pricing policy to standardize a retail price; but it cannot be imposed as ethical standard for all businesses.

Prohibition of Rebate can be permitted as "internal policy" of a Developer or an Association, which affects all their accredited/member Brokers and Salespersons. However, it cannot be imposed upon everyone; hence it cannot be entered in the Code of Ethics and Responsibilities (CODER) for RESPs.

Brokers buying properties for their own selves must be automatically favored with something we call Fellow's Discount that is equivalent to the allocated Agent's Commission. This is the relevance of mandatory disclosure if a practitioner is buying it for his/her own. We could put this in the CODER with proper explanatory note. It's like in Doctors, they normally wave Professional Fee when the patient is a fellow or a parent or spouse of a fellow.

Robert Miraflores: Have a clean conscience....look at it as a discount everybody gives it...that's what it is...As for me...if I don't feel like giving a discount on my commission which is always the case, I simply drop the deal or ask either side to shoulder the discount...any way, we only get paid on percentages. The cardinal rule I have is ...I DONT BEG FOR MY COMMISSION BECAUSE MY SERVICE HAS BEEN RENDERED....NO MORE NO LESS..

Rltr John R Petalcorin: Wait wait wait. Do you understand what REBATE is? Rebate is you "return" a part of the whole amount that is paid to you.

EXAMPLE: A seller's agent gets paid commission by the Seller. The Seller's Agent returns part of it to the one who paid him (which is basically the Seller). That is rebate.

Another EXAMPLE: A buyer's Agent gets paid professional fee by the Buyer. The Buyer's Agent returns part of it to the one who paid him (which is the Buyer). That is rebate.

Another EXAMPLE: A Buyer pays the Total Contract Price to the Seller. The Seller returns part of the payment already made back to the Buyer. That is Rebate.

NOW, I want you to look at a different example I am about to explain and ask yourself if this is a Rebate. Buyer paid TCP to the Seller. Seller paid Commission to the Seller's Agent. The Seller's Agent paid SOMETHING to the Buyer, which is a part of the Commission. Is this "SOMETHING" a Rebate? NO this is not a Rebate because the Buyer is not the one who paid the Seller's Agent. It is a Rebate if the Seller's Agent returns part of the commission back to the Seller.

Fred Bautista: hindi naman siguro unethical kong balatuhan natin buyer ng commisssion natin or pati ang seller...halimbawa blowout sila sa eat all you can.happy yong dalawa sa bundat...

Rltr John R Petalcorin: A Rebate is a precondition prior to consummation of the sale. It is something that is obligated in written or verbal commitment. Gratuity (blow-out) is not a Rebate.

Fred Bautista: suki buyer binitbit k sa developer na nagustuhan...usapan hati sa commission aba'y payag na ako noon kesa mawala pa suki mo.parang sa palengke pag suki pwede tawad sa tubo...palagay ko it is not unethical yan..

Robert Miraflores: Korek ka John....a Rebate is always a precondition to consumate a sale...wherein you are obligated and usually a broker/agent is pressured by either the buyer or the seller against his will to offer that. In my case, I don't entertain rebates....TUMAWAD NALANG KAYO....I strictly work on percentages ....kung 5% eh di 5%, kung 3% eh di 3%, it would depend on me if I like to work a deal on a set percentage. But once the commission parameters are set, then THAT'S IT with me. I only care about the percentage....

Robert Miraflores: Fred Bautista, I guess it's not unethical, kung sa umpisa palang pinagusapan na ninyo ng buyer mo. Kasi may mga pagkakataon na ang regular investors ko tumatawag sa akin at nagpapaarange ng purchase ng isang property sa developer, pero inuunahan na ako na hahati sa commission. Sa akin okay lang yun, kasi hindi naman ako nag offer ng property, sariling research ng buyer ko yun...Pero hinding hindi ako pumapayag ng rebate sa mga properties na hawak ko na minamarket ko ng sarili. Ang parating sinasabi ko sa buyer ay "MAG OFFER NALANG KAYO", at sa seller ay, "Ibigay ninyo lang ang property sa price na mabibigay ninyo ang percentage na pinagusapan natin" usually 5%.. at most often, pag dating sa dulo ng negosasyon, ay tumatawad sa commission ang seller. Nasa iyo nalang yun kung magpapatawad ka...it's your decision...kung hindi ka payag, just DROP the deal, if you can afford it...ganun lang ka practical and simple yun..

Fred Bautista: "It is a Rebate if the Seller's Agent returns part of the commission back to the Seller." yong mga "old dogs" normal na yang rebates.karamihan na seller eh friend na nila. "benta natin conjugal property namin gagawin kita exclusive,hati tayo sa kita pang gimik ha?'...

Annalissa Gutierrez: for me, parang di naman unethical ang rebate... it is like discount in favor of the buyer or seller.. pinaganda lang, rebate..or ( co-mission")hehehe... palagay ko naman, mostly sa lahat ng industriya, meron ganyan... mapa doctor, lawyer, salesman, sa military , sa gobyerno lalo na... bakit ba pinalalaki nila yang issue na yan kung unethical o hindi... nasa tao yan at nasa usapan yan.. e ang legal nga, ginagawang illegal .. yan pa kayang ethical at unethical issue na yan.. in short, deal with your conscience.. peace... opinion ko lang po yon...

Ferdie Santos: John, as you define rebate as part of a whole amount. then it is in conflict on the example you also provide which has bearing on "who paid". malinaw ksi na yung comm is a part of the tcp, but in this case hawak ng broker instead of seller. I agree as you define it, irregardless of the flow of money, as long as it was a part of the whole, which finds its way back to who paid, that's rebate. It's common practice in house agents gives rebates to buyers ksi may quota sila at nakasalalay ang allowance nila sa benta. aba, we brokers can have this agents esp unlicensed out of business. we can give a much higher rebates to buyers... hehe kailangan lang i announce sa buyers. Rebate is a "returned" part of the whole amount. commission is a part, percentage of that whole amount. it was not mentioned in your definition that is has something to do with who handles the money but simply the flow back of a portion.

Rltr John R Petalcorin: Topic is about Rebate. Not about Refund.

Ferdie Santos: My 1st and 3rd post simply repost your definition of rebate and questioning your posts above. you define it as refund din pala. I didn't realize that the definition of rebate above as you define, which I'm trying to refute was all about refund. my bad

Rltr John R Petalcorin: Regarding "Discount on Commission". The Broker, as a seller's agent, have prior authority to sell or accreditation agreement with stipulation of how much commission is agreed upon. If the Broker is amenable to a reduction of commission per potential Buyer's request, then the Broker must disclose this agreement to the Seller and make necessary amendment to the Authority to Sell in writing. I said Amendment in ATS, not a Rebate Consent.

If there is anything else important that I forgot to include in this article, or if you experienced a real estate transaction that is anomalous, scam, fraudulent scheme that you want me to document and expose for others to be warned, or if you want to donate to the war chest of real estate consumer rights advocacy, please feel free to email me at JohnPetalcorin@Gmail.Com. If you want to comment about this article, there is a provision for this purpose that you can find below.
Thank you so much for visiting my site. May God Bless You!

2/01/2013

Ethics for AIPORESP officers

QUESTION: Rltr. John, when IPORESP becomes AIPORESP, can we (officers and directors) display our designations in our calling cards and websites?

ANSWER: NO. Bawal. As an IPORESP officer and director, you are prohibited from displaying your designation in the IPORESP organization in your calling cards and websites because it will deceive the customers and clients into the perception that you are a better professional compared to the ordinary members. An officer and ordinary member should be seen as EQUALS from the sight of customers and clients. In your calling cards, websites, and business promotional materials, you can only put your name, your profession (Broker, Salesperson, etc.), license number, and contact information. You cannot put in there that you are Director for like this and that -- it will be unethical.

At present, while we are not yet AIPO, enjoy the liberty.

5/21/2011

Integrity, Honor, and Character Reference

QUESTION: Sir John, you said Integrity and Honor are the two most important values in real estate service. Ano po ang pinagka-iba ng dalawa?

ANSWER: INTEGRITY is you follow the procedures, rules, regulations, and laws; and never tolerate fraud. HONOR is you keep the trust of your customers on you by fulfilling your oaths, agreements, contracts, and loyalty relationships.

You can never prevent other people from asking irregular favor or request that tempts you to violate your integrity and honor. But you can always say say NO to the temptation.

CHAT: Sir John, dyahe naman sir pag hindi pinagbigyan, normally ang lumalapit ay kamag-anak, kaibigan, ka-socio, brod sa fraternity, sis sa sorrority, mga pinagkaka-utangan ko ng loob, mga kasama sa association. Dyahe naman pag masisira ang friendly or cordial relationship namin pag hindi ko pinagbigyan. Minsan pa nyan may kasama yang gratuity gift pag pinag-bigyan. Pag hindi po ako makisama, hindi po nila ako bibigyan ng character reference.

ANSWER: For me, Integrity and Honor is non-negotiable, you can't sell it out in exchange of anything. Your handling of tempting situation is the test of your CHARACTER. Friendship is best maintained under the banner of righteousness. Pag kaibigan kita at pinagbigyan mo ako sa hinihingi kong irregular favor, salamat, pero sure iisipin ko na hindi ka mapagkakatiwalaan kasi balang araw kaya mo rin ako ibenta sa ibang himihingi ng favor.

Character Reference is a testimonial of your integrity and honor. This can only be issued by someone who worked directly with you on integrity-sensitive and honor-sensitive projects or advocacies. Ang character reference ay hindi po yan nag tetestify on your friendliness or cordiality.

It is important that people follow the values of integrity and honor in order to maintain order, fairness, and worry-free society.

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NOTE: Please be informed that IPORESP is not a religion. It is just a coincidence that it is Sunday today and the question is related to values formation.

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I dedicate this blog to my friends who celebrate their birthdays.

Blanka Satora, Caryle Anne Tadeo, Christine Macatangay, Devin Cameron, Devy Manlatican Remollo, Erlyn Hinojas Ramos, Fred Narvas, Jenie Salvacion, Lab Kita, Lax Olarita, Maria Amor Remollo, Mark Angelo Laresma, Mark Redillas, Marybelle Agravante-Linog, Txinnie Txaiie

8/01/2010

Case when Overpricing is a Violation of the Code of Ethics

QUESTION: Sir John, I am a licensed real estate broker. A real estate owner listed her property with me, selling at P10M on a 5% commission. I offered it to a buyer at P11M, with P1M overprice and he wants to buy it. Did I violate anything?

ANSWER: YES. You violated Section 3(C) of the Code of Ethics.

The Code of Ethics has rules in Relation to Client and Customer. Section 3 (c) He should not accept any commission, fee or any valuable consideration from any party in any transaction except from his client unless with the full knowledge and consent of all the parties in the transactions. He shall not also introduce or work for an overprice either from the buyer or seller, except the usual standard rate of commission on any real estate transaction.

Read more on the Code of Ethics of Real Estate Service at http://petalcorin.blogspot.com/2010/07/code-of-ethics-in-philippine-real.html

7/02/2010

Code of Ethics in Philippine Real Estate Service - Part 2 of 2

(a) The Practitioner, in accepting an appointment or authority to act for and in behalf of a client or customer should pledge himself with utmost fidelity and good faith to protect and promote the interest of his client without, in any manner, sacrificing the legitimate interest of the other party in the transaction.
(b) For the sake of justice and fairness to his client who have reposed confidence in him, the practitioner should endeavor to be well informed of current legislation, policies and programs of the government including proposed legislation which may affect the interest of his client.
(c) He should not accept any commission, fee or any valuable consideration from any party in any transaction except from his client unless with the full knowledge and consent of all the parties in the transactions. He shall not also introduce or work for an overprice either from the buyer or seller, except the usual standard rate of commission on any real estate transaction.
(d) He should charge or collect only such fees or commissions as are fair and reasonable in accordance with local practice in similar transactions.
(e) He should not acquire an interest in or buy for himself or members of his family within the fourth civil degree, his firm or any member thereof or a corporation or partnership in which he or his relatives within the fourth civil degree have at least 20% property interest, without making his true position known to the owner, buyer or seller.
(f) He should not advertise any property without authority and in any offering, the price quoted should be in accordance with the price agreed with the owners as the offering price.
g) In the event that more than one formal offer on a specific property is made before the owner has accepted a proposal, all written offers should be presented to the owner for his decision.
(h) He should endeavor to make his client and customer conclude a fair contract advantageous to both.(i) He should assist his customer acquire possession and ownership of the property bought in accordance with the terms and conditions agreed upon.
(i) In case he is called upon to act as witness in a court proceeding he should give his testimonies in the most unbiased, honest, truthful and professional manner.
(j) As a real estate appraiser, he should not render an opinion without a careful and thorough analysis and interpretation of all factors affecting the value of the property. His counsel and advice constitutes a professional service for which he should make a fair and reasonable charge.
(k) As an appraiser, he should not undertake to make an appraisal or render an opinion that is outside the field of his experience and competence unless he obtains the assistance of another practitioner familiar with such type of property or unless the facts are fully disclosed by the client.

SECTION 4 RELATIONS TO FELLOW PRACTITIONERS

(a) He should not solicit a listing that is currently listed exclusively with another broker unless the listing agreement has expired or revoked by the owner and the owner offers to list the same to the new broker without soliciting the same.
(b) When he accepts a listing from another broker, the agency of the broker who offers the listing should be respected until it has expired and the property has come to the attention of the accepting broker from a different source, or until the owner, without solicitation, offers to list with the accepting broker. Such a listing should not be passed to a third broker or published in a daily newspaper without the knowledge and consent of the listing broker.
(c) Signs giving notice of a property for sale, rent, lease or exchange should not be placed on any property by more than one broker and only if authorized by the owner.
(d) He should not use information obtained by him from a listing broker through offers to cooperate or received through multiple listing services or other sources authorized by the listing broker for the purpose of creating a referral prospect to a third broker or for creating a buyer’s prospect, unless such use is authorized by the listing broker.
(e) He should cooperate with other brokers on property listed and share the commission on an agreed basis. Negotiations concerning property listed exclusively with one broker should be carried with the listing broker, and not the owner, except with the consent of the listing broker.
(f) He should not solicit or use the services of an employee or salesman of another practitioner without the knowledge of the employer.
(g) He should not criticize publicly a competitor nor volunteer an opinion of a competitor’s transaction. If his opinion is sought, it should be rendered with professional integrity and courtesy.
(h) The practitioner should seek no unfair advantage over his fellow practitioners and should willingly share with them the lessons of his experience and study.
(i) He should conduct his business properly to avoid any controversy with his fellow practitioners. In the event of a controversy between practitioners belonging to the same organization or association, such controversy should be submitted for arbitration to such organization or association whose decision, if accepted by both parties, will be final and binding as far as the association is concerned.
(j) If the controversy is between practitioners belonging to different organizations or associations, it should be submitted to an Arbitration Board consisting of one member from each organization or association chosen by each of the parties to the controversy. A third member shall be chosen by members previously chosen from either organization or association or from the national association where the parties to the controversy are affiliated.
(k) In case the practitioners who are parties to a controversy are not members of any duly recognized organization or the Arbitration Board can not settle the controversy, the Bureau of Domestic Trade shall assume jurisdiction over said controversy.
(l) In case a complaint is filed against a practitioner with his organization or association for unethical or unfair practice, he should voluntarily submit all pertinent facts before an investigating body that may be formed by his organization or association for evaluation and resolution.

SECTION 5. RELATION TO HIS ORGANIZATION INCLUDING THE NATIONAL ASSOCIATION TO WHICH HIS ORGANIZATION IS AFFILIATED

(a) In the interest of society and his own profession, calling or occupation, the practitioner should abide by the Constitution and By-laws of his Association or Organization and the National Association to which it is affiliated.
(b) Elections as officer or member of the governing body of the organization or association carries with it the moral obligation to serve honorably, unselfishly, diligently and efficiently. It should not be the subject of election campaigning, or use of letters or circulars announcing one’s candidacy or appealing for votes for himself or for other nominees or candidates or other form of electioneering agreement or any act which will interfere with the free and wise choice of the officers and members of the governing body of the organization.
(c) He should support his organization morally and financially and actively support its plans, programs and projects for the benefit of all the members of the organization or association.
(d) Any practitioner should first exhaust all administrative remedies available under existing laws, rules and regulations before taking any judicial or quasi-judicial action.

ARTICLE IV – SANCTIONS

Violation of any provisions of this Code shall give rise to any sanction that may be imposed by the organization to which a practitioner belongs as a member, without prejudice, however, to disciplinary action that the Department of Trade and Industry may deem expedient thereon hen the proper complaint against the erring practitioner for alleged misconduct is filed with the Department in accordance with existing rules and regulations. In the case of practitioners who are not members of any organizations, any complaint against them shall be governed by existing laws, rules and regulations governing controversies.

ARTICLE V – EFFECTIVITY [Original, 1986]

This Code shall take effect fifteen (15) days after its publication in a newspaper of general circulation. Done in Makati, Metro Manila, this 19th day of September 1986.

ARTICLE V – EFFECTIVITY [As Amended, 1993]

This Code shall take effect immediately after its publication in a newspaper of general circulation.Done in Makati, Metro Manila, this 29th day of September, 1993.

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10/11/2009

Code of Ethics in Philippine Real Estate Service - Part 1 of 2

Code of Ethics governs the conduct of those in realty service practice. Most of the principles contained herein are also discussed in the DTI-BTRCP Rules and Regulations under M.O. Order No. 39, Series of 1985.

Violations by the broker of any provisions of the Code, gives rise to sanctions that may be imposed by the brokers organization, without prejudice to disciplinary action that concerned DTI-BTRCP may impose when a complaint is filed against him.

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INTRODUCTION

The Realty Service Practice, a profession, calling or occupation, is dedicated to the promotion,development and conservation of land and natural resources, including improvements and rights and interest appurtenant thereto for the benefit and enjoyment of the Filipino people. As such, those engaged therein are bound by a code of conduct, morals, and values in performance of their duties and obligations towards the government, co-practitioners and the people they serve.

It is, therefore, imperative and necessary to adopt this NATIONAL CODE ETHICS FOR THE REALTY SERVICE PRACTICE to govern the rule of conduct of those who will engage therein.

ARTICLE 1 – DECLARATION OF PRINCIPLES

SECTION 1. The Realty Service Practice is a noble profession, calling or occupation and those engaged therein shall abide by and comply with all the laws, decrees, orders and rules and regulations enacted or promulgated by duly constituted government authorities.SECTION 2. Utmost fidelity, sincerity, respect for colleagues in the profession, and honesty shall be observed at all times by those in the realty service practice in their relation with the client, the community and the nation in general.

SECTION 3. Adequate knowledge, competence and expertise in real estate development and management shall be maintained, and the upgrading of the standards of practice shall be effected when the need arises; all these for, and in the interest of the social and economic progress of the country.

SECTION 4. The spirit of camaraderie, cooperation and professional relationship among the practitioners shall be promoted; and every organization to which they shall be encouraged to join shall aims and purposes as will set up, upgrade, and maintain a high level of integrity, honesty and competence in the profession for the best interests of the community and the nation.

SECTION 5. A high level of professional relationship with colleagues in the Realty Service Practice shall be maintained, and their dealings with each other shall always be fair, honest and just.

SECTION 6. The Golden Rule which reads “Treat others as you like them to treat you.” shall be observed in all the dealings and relation of the practitioners with clients, fellow practitioners, the organization to which they belong, and the general public.

ARTICLE II – SCOPE AND PURVIEW OF THE CODE

SECTION 1. As used in this code and for the purpose hereof, the Realty Service Practice shall embrace and include all persons, partnership or corporations who are duly licensed by the Bureau of Domestic Trade in accordance with SECTION 3 (e) & (ee) of Act. No. 2728 as amended by Act No. 3715 & 3969 and Ministry Order No. 39, such other practitioners as the Director of Domestic Trade may now or hereafter license pursuant to any law, rule or regulation that may be promulgated by the government. They shall be called Realty Service Practitioners hereinafter known as Practitioners.

ARTICLE III – RULE OF CONDUCT AND PRACTICE

The Practitioners shall be governed by the following rules of conduct and practice.

SECTION 1. RELATION TO THE GOVERNMENT

(a) The Practitioner should secure all the necessary Licenses, permits and authority from the Bureau of Domestic Trade and other government agencies as may be required by law, ordinance or rules and regulations and comply with all the requirements thereof engaging in the same.
(b) He should pay any and all taxes, fees, dues, levies or changes that the government may impose in accordance to law, ordinances, or rules and regulations.
(c) He should help, assist and cooperate with the Bureau of Domestic Trade and all government agencies and instrumentality in the promotion, development and conservation of lands and other natural resources, its improvements and rights and interest therein.
(d) He should not encourage, abet, tolerate or participate in the evasion or illegal reduction in the payment of all taxes, fees, dues, levies or charges that may be imposed by the government.
(e) He should not offer or agree to pay, to split or rebate any commission, fee or valuable consideration, directly or indirectly with any person who is not duly licensed practitioner or to cooperate, assist or endorse any transaction or engagement of his services in violation of any existing law, rule or regulation.
(f) He should indicate the license number of the certificate issued by the Bureau of Domestic Trade in his letterhead, dry seal, signboard, billboard, advertisement of other announcement in relation to the Realty Service Practice.

SECTION 2. RELATION TO THE PUBLIC

(a) The Practitioner should be imbued with a social conscience for he does not live by himself and his family alone but he is a part of society with social responsibilities.
(b) He should ensure the highest and best use of the land and the equitable distribution of ownership, irrespective of political beliefs, cultural background, sect, religion or class.
(c) He should keep himself well informed to any movement affecting real estate in his community, city or province, so that he may be able to contribute to public thinking on matters of taxation,land use, city planning and other programs of the government.
(d) He should cooperate with the government in protecting the public against deceptive, unfair and unconscionable acts and practices of some unscrupulous or unlicensed practitioners like fraud, misrepresentation, concealment of relevant information and other related unethical practices.
(e) He should ascertain all pertinent facts concerning every property and avoid error, exaggeration, misrepresentation or concealment of pertinent facts.
(f) He should not be instrumental in introducing in a neighborhood a certain character or use of property which will tend to impair or erode property values within that neighborhood.
(g) He should not be a party to the naming of a false consideration in a deed or instrument.
(h) He should keep a special bank account separate and distinct from his own funds, all monies received in trust for other persons, such as deposit in escrow, trust funds, client’s money and similar items.
(i) In his advertisements, brochures or announcements, he should present a true picture of the property, its improvements, or rights and interests therein including whatever liens or encumbrances it may have, if any, and should indicate his name, fi rm name, address and license number of the Certificate of issued by the Department of Trade and Industry. In case of real estate salesman, he should indicate the name, fi rm name and license number of the broker under whom he is employed.
(j) He should see to it that all agreement, terms and conditions, financial obligations and commitments in real estate transactions are in writing, duly signed by all parties concerned and if necessary, to be properly authenticated by a Notary Public.

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