Years ago, before we were ever able to take the classes to renew our real estate licenses online, we needed to go to live, in-person events, that could provide us with the certifications and the hours necessary to be able to renew our licenses.
So one time, I remember sitting in a class that would give me the three hours of credits necessary on the subject of ethics, that was required to renew my license, and that class was being led by a real estate attorney.
So the attorney then walked onstage at the front of the room, and with the first words out of his mouth, he said something very similar to the following to us:
“Everything you need to know about ethics I’m going to teach you in one minute right now, and then we’ll need to fill up the rest of the three hours, so that you can renew your licenses.”
Then he said something much like the following to us:
“If you’re ever wondering if you need to disclose something specific to your client during a transaction, ask yourself the following two questions:
1) If you were the client in the transaction, would you want to know about it?
2) If you were ever to be sued in the future over not disclosing this to your client, could you convince a judge and jury that you truly acted in your client’s best interest, by not disclosing this to them?
And if you somehow passed the test when answering those two questions, and you still believe that it’s OK to not disclose this information to your client, ask yourself, ‘What am I so concerned that the client will do, if I do disclose this information to them?’
Then when answering the question, if your answer involves your concern over your client doing something that would jeopardize both your commission, and the closing of the transaction, then you definitely need to tell them about this information.”
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