The Realtor Code of Ethics: Duties to the Public

Instructor: Deborah Miller

Deborah is a licensed Real Estate Broker. She has a Post Master's Certificate in college teaching with all but the dissertation of her doctorate in philosophy complete.

The Code of Ethics protects the buying and selling public. This lesson summarizes the standards of practice and duties related to the public adopted by the National Association of REALTORS.

Code of Ethics

The National Association of REALTORS (NAR) formed in 1908 at a time when there were no real estate licensing laws and real estate agents had no obligation to protect or promote the interests of their clients. The Code of Ethics was adopted in 1913 as a basis for license laws to establish a professional standard of conduct for practitioners in the real estate sales industry. Practitioners in real estate sales are real estate agents. As a member of the NAR, a real estate agent is a REALTOR, a competent and fair real estate professional of high integrity with moral conduct in business relations.

Equality

The REALTOR has an obligation to treat the public equally regardless of skin color and racial characteristics, religious beliefs, sex, disability, familial status, ethnicity, sexual preference or gender identity. On that basis, the REALTOR should not discriminate in the sale or lease of real property that results in disclosure about neighborhood composition, induce panic selling based on discriminatory neighborhood profiles, or print and circulate statements or advertisements that are selective based on discrimination. The REALTOR has the same obligation to provide fairness and equal opportunities to all personnel in real estate employment practice, whether management, salespersons, independent contractors or support staff.

Competence

In real estate practice, competence relates to the expertise of a practitioner engaged in a specific field of real estate, such as real estate brokerage, real estate appraisal, real estate counseling, property management, international real estate, commercial real estate brokerage, real estate auction and real estate syndication. A REALTOR should be competent in the specific field of real estate service he provides to clients and customers. A REALTOR should not engage in offering specialized professional services outside of her field of expertise unless the lack of competence is disclosed to the client or an expert specialized in the field is engaged to assist and the client has been informed. A REALTOR should not engage in the practice of law. Legal counsel should be recommended when legal advice or service is needed.

Expertise

In real estate practice, a REALTOR may provide specialized services such as price opinion on real property values. A broker's price opinion is a broker's valuation or appraisal of real property to determine price. In property valuation, a REALTOR should be knowledgeable about property types and values, be able to access resources to formulate a valid opinion, and be familiar with property locations; otherwise, the lack of knowledge must be disclosed. If consulting for a fee, the advice rendered should be objective and the fee should not be determined by the substance of advice given. Compensation for brokerage and transaction services should be paid separate from a consultation service fee.

Integrity

A REALTOR should present the truth and act with integrity in his communications, advertising, marketing and other representations. Her status as a professional should be apparent in her communications. The terms and conditions in advertisements must be clearly disclosed simultaneous to any 'free' offers or inducements to list, sell, purchase or lease, subject to state law restrictions and applicable Standards of Practice. A REALTOR should have the authority to advertise and the REALTOR's firm should be identified when practical. When a REALTOR has ownership interest, status as owner and REALTOR or real estate licensee must be disclosed. The licensee's state should also be identified on REALTOR firm websites that are accurate and free of misrepresentations. Should a REALTOR intend to share or sell consumer information gathered via the Internet from service offers, the REALTOR should disclose such intentions in a readily apparent manner.

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