PREMIER Business and Finance: The National Association of REALTORS® Code of Ethics actually finds its roots in the Golden Rule. The Code of Ethics has 17 articles that clearly state what is expected of us as we conduct our daily business.
PREMIER Business and Finance
When every real estate salesperson finishes his or her specialized training, passes the California Real Estate Licensing Exam, and passes a background check to receive a license, many processes are still ahead to assure that they become the REALTOR® you would choose to represent you.
To begin, let’s define some terms that are often misunderstood as interchangeable:
Real Estate Agent – Anyone who earns a real estate license may be called a real estate agent, also referred to as a real estate salesperson.
REALTOR® – A real estate agent who is a member of the National Association of REALTORS®, which means he or she must uphold the standards of the organization and its code of ethics. Most real estate companies require their agents to be members of this organization, and hold them accountable to this extensive code of ethics.
Real Estate Broker – A person who has taken education beyond the agent levels as required by state laws, and has passed a broker’s license exam. Brokers can work alone or hire agents to work for them.
Real Estate Associate Broker – Someone who has taken additional education classes and has earned a broker’s license but chooses to work under the management of a broker.
When you retain the services of any of the above, remember that you are actually retaining the services of the broker, which can be a company or an individual acting as a real estate broker. State laws require that brokers oversee and manage the activities of each real estate agent.
The National Association of REALTORS® Code of Ethics actually finds its roots in the Golden Rule. the Code of Ethics has 17 articles that clearly state what is expected of us as we conduct our daily business.
Articles one through nine state the Duties to Clients and Customers, articles 10 through 14 state the Duties to the Public, and articles 15 through 17 state the Duties to other REALTORS®.
Note that the primary content of this document is directed to clients and customers. Let’s look at those nine right now.
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant, or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.
REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.
REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker.
REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative.
REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.
REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR®, or REALTOR®’s firm may receive as a direct result of such recommendation.
In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR®’s client or clients.
REALTORS® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients’ monies, and other like items.
REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases, are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing.
A full copy of the NAR Code of Ethics is at www.realtor.org/topics/code-of-ethics.
Branch Manager, Rancho Santa Fe, Fairbanks Ranch, Del Rayo