Book : California Real Estate Practice [Third Edition] By Robert L. Herd and Bruce A. Southstone

Chapter 3 : Ehics,Fair Housing and Respa

Class Discussion Topics

1. Have you ever been subjected to discrimination of any kind? If so, describe the situation and discuss how it made you feel.

2. You overheard a licensee in your office telling someone over the telephone that she had two offers on her listing, one of which was her own, and that since hers was so good, she didn't tell the sellers about the other offer. What should you do?

3. You are showing property to a middle-aged couple. They ask you to pull over to the curb and just sit there for a while so they can observe the ethnic makeup of the people who pass by. Discuss how you should handle that situation.

4. Bill just got a new listing that is only a block away from the local synagogue. He feels that it is a major selling point and writes and submits an ad to you to approve that says: "This beautiful home is steps away from the Jewish synagogue; don't miss this great opportunity!" Is Bill in violation of any antidiscrimination laws or Code of Ethics issues? If so, which ones?

5. Broker Gerry listed a thirty-home subdivision. She advertised that the homes were "selling fast." As buyers came in to the model home, they were shown a model of the subdivision that had "Sold" flags on quite a number of the lots. The truth was that only four homes had actually sold. What are the ethical and legal ramifications of Gerry's actions?

6. Richard and Sue were salespersons from competing offices. They were both asked to give a listing presentation to the Johnsons. The market data very clearly showed the Johnsons' home to be worth about $475,000. It was an average market with a reasonably good supply/demand ratio. Sue showed the comparables to the Johnsons and suggested an asking price of $489,000. Richard showed them the same data, but suggested, "Because the market is so hot, you can probably get $525,000 and you should list at $525,000." Are either Richard or Sue guilty of a violation of the Code of Ethics?

7. Virginia, who is handicapped and gets around in a wheel-chair, has made arrangements to meet friends at a local restaurant for dinner. When she arrives, the receptionist tells her that she is very sorry, but the front doors aren't wide enough to accommodate her wheelchair and it is too crowded inside for it as well. She suggests a restaurant down the street. Is the restaurant in violation of any civil rights issues, and if so, which one(s)?

8. Sammy has shown a number of homes to Gloria and Jeff who have declined them because of their proximity to traffic noise. Sammy has just shown them a home they really want to buy. It is on a reasonably quiet, two-lane street, but Sammy knows that it is scheduled for widening into a four-lane major thoroughfare within the next two years. He sells the home to Gloria and Jeff without mentioning the street widening and the sellers do not disclose it in their Transfer Disclosure Statement. Has either Sammy or the sellers done anything wrong? If there was any wrongdoing by either party, was it unethical, illegal, or both?

9. Lisa, a title company representative, wants to get Geri's title and escrow business. She tells Geri that she will advertise in the local real estate magazine with her and take 20 percent of the page, letting Geri have the other 80 percent. Lisa states that she will pay 20 percent of the cost of the ad and have information about her company in that portion. Is Lisa violating the RESPA?

10. Billy, an insurance broker, invites three real estate brokers to play golf with her at her club. She pays for their green fees and golf cart. They have a great time and during the game, Billy says that she really appreciates their business and that if they keep sending her referrals like they have been, that there's "plenty of golf matches to come." Has anyone in this foursome violated RESPA? If so, who and how?

Chapter 3 Quiz

1. Which of the following best describes ethics?
a. Doing what is right because it is right.
b. Doing what is legal.
c. Doing what meets your personal needs best.
d. Doing what is expeditious.

2. The relationship that ethics has to law is
a. the law is preceded by ethics.
b. what is ethical is legal.
c. if an act is illegal, it is also unethical.
d. ethics and the law set minimum standards of behavior.

3. A broker who had a disabled employee widened the restroom doorway to accommodate a wheelchair. This work complied with
a. the Fair Housing Amendment Act of 1988.
b. the Rumford Fair Housing Act.
c. Executive Order 11063.
d. the Americans with Disabilities Act.
4. Which of the following would not be an unethical act?
a. Having multiple offers on your own listing, including your own offer, and only telling the seller about your own offer.
b. Taking the long route to show a home to someone so that you can show them the schools, parks, and other area amenities.
c. Placing all of your listings immediately on the MLS, regardless of how "saleable" they are.
d. Telling a licensee who calls about one of your listings that the property is sold, when it really isn't because you think you have a buyer for it yourself.

5. Which of the following is considered discriminatory in an ad?
a. Martin Luther School District
b. Mother-in-law suite
c. Bachelor apartment
d. Near St. Bartholomew's Catholic Church

6. A broker is canvassing a neighborhood for listings by telling the occupants that minorities are moving in and prices will soon start to decline. His actions are
a. lawful.
b. ethical.
c. acceptable if true.
d. blockbusting.

7. A broker declined to show a home in a gated community to a young Hispanic family with four young children, even after the family had inquired about the home. The broker's action would be proper if
a. elderly people occupied 33 percent of the homes.
b. the broker considered the home to be too small for the family.
c. there were no other children in the development.
d. the development was restricted to occupants fifty-five years of age or older.

8. Which of the following is not a RESPA violation?
a. A broker sharing advertising space on a pro rata basis with a lender, where they each pay their proportionate share of the cost.
b. A home inspector who gives dinner certificates to several real estate licensees who use her services all the time.
c. An insurance broker who buys
theater tickets for a real estate licensee who sends her lots of business.
d. Loan transactions to select people for temporary or short-term purposes.

9. A lender hosts a continuing education program for real estate professionals. Which of the following is a RESPA violation?
a. Have a representative present and promote the lender's services.
b. Defray the cost of the program tuition.
c. Hand out promotional material about the lender's services at the program.
d. Provide complimentary food and beverages.

10. A mortgage broker provides a snack tray and sodas for a real estate licensee's Open House. The mortgage broker does not appear at the Open House nor does she provide any marketing or promotional materials for the Open House. Her actions are
a. unethical.
b. legal.
c. very kind.
d. a RESPA violation.